- This topic has 12 replies, 6 voices, and was last updated 11 years, 11 months ago by Coronita.
-
AuthorPosts
-
May 2, 2012 at 12:44 PM #19748May 2, 2012 at 12:56 PM #742678allParticipant
If home office remodel is deductible and you add a room to your house and move your existing home office to the new room can you deduct the full cost of addition?
How is it possible that the county destroys blueprints 90 days after the work is done? What’s stopping me from making an unpermitted modification (something that’s not visible from the outside) and claiming that’s how the things were as long as I don’t get caught during construction?
May 2, 2012 at 1:04 PM #742681The-ShovelerParticipantWell if we brand all SD RE as irealestate it will become much more valuable IMO.
That and get rid of the ideal that all new development should be high density,
Really any home owners here really want High Density RE across the street from their house ?
I mean really ? I don’t think I am going to voluntarily sell my house to move to a condo anytime soon how about you.
I not looking forward to anyone building a condo or apartment next door either but to each their own.May 2, 2012 at 1:09 PM #742682SK in CVParticipant[quote=captcha]If home office remodel is deductible and you add a room to your house and move your existing home office to the new room can you deduct the full cost of addition?
How is it possible that the county destroys blueprints 90 days after the work is done? What’s stopping me from making an unpermitted modification (something that’s not visible from the outside) and claiming that’s how the things were as long as I don’t get caught during construction?[/quote]
No, and good question.
You’d have to depreciate the cost of the remodeling, not write off the whole thing in the year you do it.
I’ll take your word for it that blueprints are destroyed after 90 days. (does the city do that too?) My old house in poway had tons of work done that was only partially permitted. It was done before the city took over administration of permits from the county. The only thing their records showed was the approximate square footage, and that there was electrical and plumbing. The guy who I bought it from, had built a 1800 square foot, 2 bedroom guest house. I strongly suspect with no permits at all. I don’t remember the exact circumstances, but I had to do something to it, got a permit, and they essentially confirmed the whole thing was permitted, because the records they inherited from the county were so incomplete. So I think it might be possible.
May 2, 2012 at 1:24 PM #742686bearishgurlParticipant[quote=captcha] . . . How is it possible that the county destroys blueprints 90 days after the work is done? What’s stopping me from making an unpermitted modification (something that’s not visible from the outside) and claiming that’s how the things were as long as I don’t get caught during construction?[/quote]
Nothing, that I can see . . . as long as the “footprint” remains unchanged.
May 2, 2012 at 1:26 PM #742688AnonymousGuest[quote=flu]Or at least something about making money…[/quote]
What do you mean?
We have a prostitution thread.
May 2, 2012 at 1:40 PM #742691briansd1Guest[quote=SK in CV] So I think it might be possible.[/quote]
I would agree with that. Check the records and if there are no records, then you could assume that the work already there is permitted (I remember that your house is in 4S so it’s fairly new. For those have have older houses, the city didn’t issue permits until a few decades ago)
May 2, 2012 at 1:42 PM #742692CoronitaParticipant[quote=SK in CV][quote=captcha]If home office remodel is deductible and you add a room to your house and move your existing home office to the new room can you deduct the full cost of addition?
How is it possible that the county destroys blueprints 90 days after the work is done? What’s stopping me from making an unpermitted modification (something that’s not visible from the outside) and claiming that’s how the things were as long as I don’t get caught during construction?[/quote]
No, and good question.
You’d have to depreciate the cost of the remodeling, not write off the whole thing in the year you do it.
I’ll take your word for it that blueprints are destroyed after 90 days. (does the city do that too?) My old house in poway had tons of work done that was only partially permitted. It was done before the city took over administration of permits from the county. The only thing their records showed was the approximate square footage, and that there was electrical and plumbing. The guy who I bought it from, had built a 1800 square foot, 2 bedroom guest house. I strongly suspect with no permits at all. I don’t remember the exact circumstances, but I had to do something to it, got a permit, and they essentially confirmed the whole thing was permitted, because the records they inherited from the county were so incomplete. So I think it might be possible.[/quote]
I have a dumb question… If you take these sort of home office deductions, how are things affected when you end up selling your home. (Just a general discussion, to get an idea)…
May 2, 2012 at 1:47 PM #742695allParticipant[quote=SK in CV]
I’ll take your word for it that blueprints are destroyed after 90 days. [/quote]That’s what I was told by a Department of Planning and Land Use representative last week after I called to verify what an architect told me.
The county records show that my 2001 house passed few inspections and that’s it. The plans are destroyed 90 days upon completion due to the lack of storage space. That is the current, not just 2012 practice.
[quote=SK in CV]
(does the city do that too?) [/quote]The same architect said the City of San Diego and the City of Vista (might have been San Marcos) have all the records going back few decades on microfilm. Other cities are hit or miss.
May 2, 2012 at 1:51 PM #742696SK in CVParticipant[quote=flu]
I have a dumb question… If you take these sort of home office deductions, how are things affected when you end up selling your home. (Just a general discussion, to get an idea)…[/quote]
Not a dumb question at all. In fact a very good one.
Theoretically, when you sell, the portion that’s been depreciated doesn’t qualify as personal residence, so doesn’t get the personal residence exemption. Sales price has to be allocated between personal residence and depreciable business property. Depreciation gets recaptured as ordinary income (I can’t remember for sure on this, maybe slightly better than ordinary rates) and the balance is taxable as a long term capital gain.
I say theoretically because sometimes this gets ignored or forgotten, even by tax professionals. Unless of course the home is sold at a loss. In which case the loss attributed to the business portion is fully deductible as an ordinary loss and not subject to capital loss limitations.
May 2, 2012 at 2:34 PM #742704CoronitaParticipant[quote=SK in CV][quote=flu]
I have a dumb question… If you take these sort of home office deductions, how are things affected when you end up selling your home. (Just a general discussion, to get an idea)…[/quote]
Not a dumb question at all. In fact a very good one.
Theoretically, when you sell, the portion that’s been depreciated doesn’t qualify as personal residence, so doesn’t get the personal residence exemption. Sales price has to be allocated between personal residence and depreciable business property. Depreciation gets recaptured as ordinary income (I can’t remember for sure on this, maybe slightly better than ordinary rates) and the balance is taxable as a long term capital gain.
I say theoretically because sometimes this gets ignored or forgotten, even by tax professionals. Unless of course the home is sold at a loss. In which case the loss attributed to the business portion is fully deductible as an ordinary loss and not subject to capital loss limitations.[/quote]
SK, thank you for sharing your knowledge. I appreciate you schooling me and for more detailed questions, I’ll talk to an accountant. I just wanted some general answers…
One question though… For a primary residence, if you sell your home less than it’s worth, you can’t write it off.. So if I understand you correctly, with a home office deduction, than this becomes possible (as an offset to whatever gain was reported in the depreciation of the home office)?
May 2, 2012 at 2:51 PM #742711SK in CVParticipant[quote=flu]
One question though… For a primary residence, if you sell your home less than it’s worth, you can’t write it off.. So if I understand you correctly, with a home office deduction, than this becomes possible (as an offset to whatever gain was reported in the depreciation of the home office)?[/quote]Yep, it does. Keep in mind that most home offices are pretty small. Like the 10′ by 12″ office in your massive estate might only be 3 or 4% of the total space. So the write off of a loss isn’t nothing, but it’s pretty small in comparison to the total loss.
Edit added: Sell for less than it’s worth? I assume you mean less than it cost?
May 2, 2012 at 3:26 PM #742715CoronitaParticipant[quote=SK in CV][quote=flu]
One question though… For a primary residence, if you sell your home less than it’s worth, you can’t write it off.. So if I understand you correctly, with a home office deduction, than this becomes possible (as an offset to whatever gain was reported in the depreciation of the home office)?[/quote]Yep, it does. Keep in mind that most home offices are pretty small. Like the 10′ by 12″ office in your massive estate might only be 3 or 4% of the total space. So the write off of a loss isn’t nothing, but it’s pretty small in comparison to the total loss.
Edit added: Sell for less than it’s worth? I assume you mean less than it cost?[/quote]
Yes, poor choice of words… Thanks for the clarification. I appreciate the knowledge transfer…. Now if I can just crowd out the rest of my Ron Paul indoctrination with other, more useful information 🙂
-
AuthorPosts
- You must be logged in to reply to this topic.