Quote:
Originally Posted by WHYYY
is this at all possible?
has anyone ever done this? if so, for which items and amounts?
what is the max?
what's covered, what's not?
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I'm not sure exactly what you're asking, but
I think you're wondering if money spent on materials to finish your basement can be used to reduce your income tax. Please correct me if I'm wrong.
The answer to that question is, "No, not really."
You cannot deduct any household expenses except interest paid on mortgage. And that's not a true deduction because it goes into your itemized deductions, and only a percentage of it is figured against your tax liability.
You will increase the value of your home if you finish your basement, but you will also (probably) increase the assessed value and see an increase in your property taxes.
However... You can get an energy tax credit for money spent on insulation, and maybe windows, depending if they qualify.
The only thing that might change that is if you have a business in your home, and use the finished basement as an office. Then you can deduct at least part of the expense. But even then, you have to file it as business profit/loss (Schedule C), and might not be able to claim the full amount spent.
Basically, I'd advise you to NOT finish your basement in hopes of saving money on taxes. However, if you want to increase the livability and value of your house, go for it!