Categorizing home repair/improvement expenses

Discussion in 'Microsoft Money' started by H Gohel, Dec 13, 2004.

  1. H Gohel

    H Gohel Guest

    Trying to figure out how to record & categorize expenses that go towards
    repairs and improvements of my home. Looking at the type of expenses,
    it looks something like this:

    1. Major jobs such as painting, chimney repair etc.
    2. Minor repairs (buying things from Home Depot etc)
    3. Buying equipment for yard maintenance etc.

    I was about to set up a sub-categories like this:

    Household : Maintenance
    Household : Repairs
    Household : Tools

    etc. which roughly matches the type of expenses in #1, #2 and #3.
    However, in setting up the categories, Money online help hints that home
    improvement and repair expenses should be tracked under the asset
    account...I'm confused by that.

    So if I paint the house, should that be recorded as in "Increase" in the
    asset account, i.e. a transfer from my bank account to the home account?
    Or should I just go ahead and create the Household : Maintenance
    category and record it as an expense? Money seems to show those
    expenses on House View page.

    I'm using Money 2004 if it matters.

    Thanks.
     
    H Gohel, Dec 13, 2004
    #1
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  2. H Gohel

    Dick Watson Guest

    The basic answer is that spending that increases your basis in the property
    may be better to track as a transfer to the asset account rather than as a
    categorized expense. This is just to make it easier to later account for
    your basis. With the current tax law, this isn't nearly as important as it
    used to be since selling a house creates taxable capital gains in many fewer
    cases than it used to.

    What spending increases basis? That's a question for the IRS, not here.
    There are IRS publications that treat this. (See
    http://www.irs.gov/publications/p551/index.html.) These things are generally
    things that are NOT repair/maintenance.
     
    Dick Watson, Dec 13, 2004
    #2
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  3. H Gohel

    Guest

    The basic answer is that spending that increases your basis in the property
    may be better to track as a transfer to the asset account rather than as a
    categorized expense. This is just to make it easier to later account for
    your basis. With the current tax law, this isn't nearly as important as it
    used to be since selling a house creates taxable capital gains in many fewer
    cases than it used to.
     
    , Mar 24, 2014
    #3
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