Two things, first, assuming you are not going to claim a home office deduction, you add remodeling costs to the basis of your home, which lowers your gain when you sell it (although with the current level of gain exclusion, this doesn't have a very dramatic effect anymore). Second, if you are planning on claiming a home office deduction, these costs would (normally) be capitalized and you could claim a depreciation expense for them on an annual basis. See IRS Publication 587 for the particulars on deducting expenses associated with a home office, as the IRS is quite particular when it comes to deducting expenses associated with your home.
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