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Financial Planning / Tax Strategies


Subject:  Re: New well dug- tax deductible? Date:  7/18/2012  8:20 PM
Author:  aj485 Number:  116429 of 127752

I have an insurance claim in, but don't don't know how that will pan out.

Is this expense tax deductible?

Not immediately deductible as an expense, but as a capital improvement to your home, it may be an increase your adjusted basis. If you do succeed in the insurance claim, be aware that any reimbursement that you receive from the insurance company will deduct from your adjusted basis and will be an offset to the increase in basis. See Worksheet 1, the instructions for Worksheet 1 and the section on Determining Basis in IRS Pub 523 as a starting point.

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