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Old 10-25-2009, 06:12 AM
 
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yep, keep good records because it all counts... only thing that dosnt count is items considered repairs or items that wear out ...
sometimes those items are hard to tell where they fit... new roof im not sure about as that may be repair or wear item.... renovating kitchen , adding bathroom, new extension are givens. but some are hard to tell
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Old 10-25-2009, 10:30 AM
 
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Quote:
Originally Posted by mathjak107 View Post
... new roof im not sure about as that may be repair or wear item....
A new roof is definitely an improvement that counts as an adjustment to the cost basis. In fact, the IRS specifically uses that as an example when explaining the issue. This link should take you directly to "Comprehensive examples, Example 1:

Publication 523 (2008), Selling Your Home
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Old 10-25-2009, 01:07 PM
 
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interesting how its only using the cost basis and resale price, that way any mortgages or equity you sucked out dosnt even figure in..
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Old 10-25-2009, 04:10 PM
 
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Quote:
Originally Posted by mathjak107 View Post
interesting how its only using the cost basis and resale price, that way any mortgages or equity you sucked out dosnt even figure in..
Which takes us full circle back to Tuborg's question and my initial response. Loans do not factor into the equation at all.
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Old 10-25-2009, 04:19 PM
 
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correct, they do not
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Old 10-25-2009, 06:48 PM
 
Location: Pinal County, Arizona
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Quote:
Originally Posted by MadManofBethesda View Post
A new roof is definitely an improvement that counts as an adjustment to the cost basis. In fact, the IRS specifically uses that as an example when explaining the issue. This link should take you directly to "Comprehensive examples, Example 1:

Publication 523 (2008), Selling Your Home
While it may adjust your basis for tax purposes, it may not adjust your VALUE for resale purposes.
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Old 10-26-2009, 01:45 AM
 
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quite a few things in the tax world have no bearing in the real world. just look at depreciation on rental property,... the tax world says the building is wearing out and becoming worth less over time no matter what the market does
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Old 10-26-2009, 07:46 AM
 
Location: Maryland
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To the OP: Home equity is not part of our retirement financial plan. Its a place to live, paid off and it's ultimate value will be distributed (or retained) by one of my children as circumstances may dictate upon our demise. The trees on the back acre (900) were planted by myself and my children more than a quarter century ago. They are now 30' plus in height and provide a wonderful natural reserve. The playhouse I built for my children long ago still stands and is well maintained, it will serve a new generation of grandchildren. I am of the opinion that a home is more than a temporary residence or a tax consideration. It is a place of tribal history and security, to be passed down to following generations. The backyard of my front acre includes trees planted as acorns by my then 5 year old daughter. The trees are all named and have great value to my children. They are now 30+ feet high. Our home has a history which is not subject to financial considerations. Our home is more than an simply an asset, it is our home.
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Old 10-26-2009, 05:54 PM
 
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I am sensing that there are those people who are fortunate enough to not have the need to consider the equity in their home for retirement purposes and those who are not as fortunate and do/possibly need to consider it to sustain them.
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Old 10-26-2009, 07:56 PM
 
Location: Maryland
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I must agree that some may need to "cash out" their current home for retirement income support. One does what one must do. In doing so, I feel sorry that many have not viewed their home as separate from their retirement support plans, in the sense of income support. Having a paid off home to live in until death has always been a priority to me. Being captured by the nursing home industry is not part of our final exit plan. Likewise, the 55+ community industry appears to me to be another form of garbage marketing hype with little or no value, in my totally personal opinion. I was bemused, appalled and amazed at the real estate bubble, it seemed totally irrational to me. One's home ought not, in my view, be considered anything other than a place where one lives, hopefully until its time to make the next big jump. Those who need to cash out have new problems created by what does one do with the money? Who do you trust to manage it when you or your spouse are no longer capable of doing so? The problems and risks of managing assets in retirement are well known. Your original post was quite pertinent on this issue and I confess I don't have good advice for those who are dependent upon this condition. The markets have seriously proven of late that they are, as history proves, subject to huge variations. My personal view is that having one's paid off residence is a good starting point. JMHO.
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