Easy Tax Question

[allbojon]

Hello, I own a parcel of land accessed by a dedicated private road system. Road washed out by cloudburst. Can I claim the repair cost as a deduction on my Federal 1040? Special form? Thank you

[Rand_Rover]

@allbojon

Hello, I own a parcel of land accessed by a dedicated private road system. Road washed out by cloudburst. Can I claim the repair cost as a deduction on my Federal 1040? Special form? Thank you

Do you operate a business on the land? Is the road on the land?

If the first is a yes and the second is a no, then I think the repair costs could be deductible. I’d want some more facts about how the road is owned etc. before I decided.

If both answers are yes or the first answer is no, then I think the costs are in all likelihood not deductible and should instead be capitalized into your basis in the land.

(Also, I can make any “easy” tax question as complicated as you like. )

[SandyHook]

Deduct it.

Worst case scenerio they say no and you have to pay. Most cases, if you just give up then and do what they say, there’s no penelty or interest.

Kind of a basic rule in anything approaching a grey area.

IAMATLOAEWMKS.

[Billdo]

@SandyHook

Deduct it.

Worst case scenerio they say no and you have to pay. Most cases, if you just give up then and do what they say, there’s no penelty or interest.

Kind of a basic rule in anything approaching a grey area.

IAMATLOAEWMKS.

This is really, really, really dangerously bad advice. It is flat out wrong.

Even if you make an innocent tax mistake, there will always be interest and likely be penalties. (If you make a mistake in your favor, the government may even pay you interest on your refund if you amend your taxes.)

In fact, this is not an easy tax question, as there are some circumstances in which it might be deductible and a whole host of situations in which it would not be. You should consult a tax professional with specific questions like this.

[Rand_Rover]

@Billdo

This is really, really, really dangerously bad advice. It is flat out wrong.

Even if you make an innocent tax mistake, there will always be interest and likely be penalties. (If you make a mistake in your favor, the government may even pay you interest on your refund if you amend your taxes.)

In fact, this is not an easy tax question, as there are some circumstances in which it might be deductible and a whole host of situations in which it would not be. You should consult a tax professional with specific questions like this.

Agreed in all particulars.

[Gfactor]

@SandyHook

Deduct it.

Worst case scenerio they say no and you have to pay. Most cases, if you just give up then and do what they say, there’s no penelty or interest.

Kind of a basic rule in anything approaching a grey area.

IAMATLOAEWMKS.

As **Billdo **has pointed out, this is terrible advice.

Allow me to underscore two portions of the Registration Agreement.

To the OP:

Users should be particularly wary of medical, legal or other professional advice posted on the message board and recognize that it is no substitute for in-person consultation with a competent professional.

To SandyHook:

You agree, through your use of this service, that you will not use the SDMB to post any material that you know or should know is false and/or defamatory, inaccurate, abusive, vulgar, hateful, harassing, obscene, profane, threatening, invasive of a person’s privacy, or in violation of U.S. law. You agree not to post material that in our opinion encourages activity that is illegal in the U.S. We reserve the right to revoke the posting privileges of persons misrepresenting themselves on the SDMB.

Gfactor
General Questions Moderator

[DrDeth]

Well, I have asked my Bro, and remembering you are not his cleint and we don’t have all the info (he assumes the property is not used for business or farming), then you’d have two possible ways:

Casualty loss. He sez the expense is likely not big enough to get any significant deduction. But if you use Turbo-tax you could plug in the numbers, anyway. Remember, any deduction here would be less whatever any insurance paid. Did you have insurance?

Added to basis: * could* be considered a “capital improvement”. This means no deduction this year, but less net profit when you sell it. But a repair might not be a capital improvement, it depends.

Now, if the property is used for a business, farm or is rented, the expense *could *go on Sch C, F or E.

How much did the repair cost, about?

If it’s enough so that any of these other than the Casualty loss sounds good, then my Bro suggests you hire a Tax professional, a EA or CPA.

[allbojon]

Thanks all for confusing me. 40 acre parcel with no dedicated roads on it. No business usage. Many parcels in area with a dedicated road system to provide access to all. I am at the end of the road. Road washed out due to cloudburst. I paid to repair the sections to get to my land. Road grader=$1400. No improvements made, just access. The road system is private for property owners and is described in the deeds.

I appreciate your comments and I will be buying lunch or dinner for a CPA to ask them.

[drpepper]

@Billdo

This is really, really, really dangerously bad advice. It is flat out wrong.

Even if you make an innocent tax mistake, there will always be interest and likely be penalties. (If you make a mistake in your favor, the government may even pay you interest on your refund if you amend your taxes.)

In fact, this is not an easy tax question, as there are some circumstances in which it might be deductible and a whole host of situations in which it would not be. You should consult a tax professional with specific questions like this.

Tax pro here. Thirded.