Two distinctions usually matter. One is a repair versus a capital improvement. The other is a primary residence versus a rental. Ask a tax professional about your own circumstances — nobody in this trade can answer it for you.

What the file should contain for an Austin property

There are 195,678 owner-occupied units here against a median value of $512,700. So most readers of this page own the home they live in rather than an income property. That is the distinction most likely to decide the answer. Either way the documents are identical. Gathering them at the time costs nothing, and gathering them two years later is often impossible.

The reasoning behind that

Tax treatment of building work often turns on whether the spending restored something or improved it. It also turns on whether the property produces income. Those calls are made against your own circumstances and the rules that apply to you. This page is not the place they get made. What this page can usefully say is what to keep. The documents are the same either way, and they are much harder to assemble afterwards. The invoice describing what was installed and where. The survey from before the work. The permit, if one was pulled. The warranty. Dated photographs. Keep them whether or not you expect a deduction. The same file answers a tax question, an insurance question and a buyer’s question. It is the cheapest thing in this whole process. Then ask an accountant. A contractor’s opinion on tax treatment is worth exactly what a tax advisor’s opinion on pier depth is worth.

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