Whether a tax payer can deduct home improvement expenses either as a deduction or credit in IRS or AZ state return.
One of my client insisted on including this in the return to be prepared by me. I have no idea about this deduction either in IRS or AZ state.He was saying that one of his friends got this deduction from another tax preparer.
Thanks in advance lfor your advice
Perhaps the taxpayers friend did home improvements that qualified for the energy credits last year?
Home improvement expenses can not be deducted unless they fall into the nonbusiness energy property credit or energy efficiency property credit areas or they fall into the medical expense area. Otherwise, the improvements are added to the cost basis of the home.
Is it possible that they are talking about the energy credits?
The lifetime energy saving home improvement tax credit was good for 2006 & 2007 and will be available again in 2009 (with added qualified property). That is for money spent on "qualified energy-savings property". A government website: www.energystar.gov gives some helpful information.
Then there is the alternative energy-generating equipment credit - for solar energy property
Your client might want to get clarification from their friend!
I do not know AZ tax law - so can't help you there.
Hope this helps.
the energy credit went out of effect for 2008 but is reinstated for 2009, Other Home Improvements are not deductable
