This a question on civil law in Massachusetts. I have a court judgment against a home improvement contractor for approximately $16,000. I can recover $10,000 from the Massachusetts Guaranty Fund, can I deduct the difference ($6,000) on my tax return? He has failed to pay any monies.
Monday, February 14, 2011
Subscribe to:
Post Comments (Atom)
2 comments:
Hi Fred, let me start with saying that I apologize for a late comment. Since this is tax season, you can understand how busy we are. Now to answer your question,
1) First, was your home improvement for a rental home? or personal residence?
2) Did you pay this contractor? If so, then the difference can be deducted but depends on item 1 above.
If the home improvement was for your personal residence then it is considered a personal expense. Therefore, it is not a deductible expense. However, it will increase your cost basis of your home and you can write this off in the event you sell you home and your gain exceeds $500,000 (assuming you will be filing married filing joint).
I hope explanation helps. Please feel free to post on our blog if you have more questions.
Good luck,
Web Tax Office Team
Hello Web Tax Office,
If I were to sell the LLC (registered in Virginia) to another company based in Hong Kong in return for shares in that company, do I need to claim anything in 2011 or only when I would sell those shares?
Thanks!
Post a Comment