Posted by JPiper on January 26, 2001 at 10:09:46:
“Save” is not really the right word, but I suppose in a sense it would be like that. In a rehab when I incur an “expense”…let’s say I install a hot water heater, that amount is debited to the property account…meaning the amount invested in the property increases…cost basis goes up. The repairs continue to accumulate until such time as the property is sold. Upon sale, the cost basis is subtracted from the sales proceeds.
Credit card interest? That’s a good question. My tax guy seems to think that this could be legimate as long as you haven’t mixed personal use and business use on the credit card. However, I would say this is somewhat aggressive. Probably should be addressed to your tax advisor. If it is legitimate it too would be added to the cost basis of the property.