A Tax Break on Condo Assessments
You might not have to worry about capital gains tax when you sell a condo that's undergone capital improvements.
I live in a condo that is 20 years old, and we are now faced with major projects, including replacing the roof. If the condo board charges owners a special assessment for these costs, can we apply that amount to help lower the tax bill when we sell our condos? -- H.G., via e-mail
If the assessment is specifically for capital improvements, rather than regular maintenance, the amount can be added to your cost basis when you sell your condo, which could reduce your taxable gain. “It is important to have documentation of the nature of the assessment and what the funds were used for,” says Susan Howe, a certified public accountant in Philadelphia.
But you may not have to worry about capital gains tax anyway. Most people no longer have to pay taxes on their profits when they sell their principal residence, whether it’s a house, condo, co-op or duplex, says Greg Rosica, a tax partner at Ernst & Young and a contributing author to the EY Tax Guide 2015. If you lived in the home for two of the five years before the sale, up to $250,000 in home-sale profits is tax-free, or $500,000 if you’re married and file jointly.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
Is There Such a Thing As a Safe Stock? 17 Safe-Enough IdeasNo stock is completely safe, but we can make educated guesses about which ones are likely to provide smooth sailing.
-
We're 64 with $4.3 million and can't agree on when to retire.I want to retire now and pay for health insurance until we get Medicare. My wife says we should work 10 more months. Who's right?
-
Missed an RMD? How to Avoid That (and the Penalty) Next TimeIf you miss your RMDs, you could face a hefty fine. Here are four ways to stay on top of your payments — and on the right side of the IRS.
-
Over 65? Here's What the New $6K Senior Tax Deduction Means for Medicare IRMAATax Breaks A new tax deduction for people over age 65 has some thinking about Medicare premiums and MAGI strategy.
-
In Arkansas and Illinois, Groceries Just Got Cheaper, But Not By MuchFood Prices Arkansas and Illinois are the most recent states to repeal sales tax on groceries. Will it really help shoppers with their food bills?
-
New Bill Would Eliminate Taxes on Restored Social Security BenefitsSocial Security Taxes on Social Security benefits are stirring debate again, as recent changes could affect how some retirees file their returns this tax season.
-
Can I Deduct My Pet On My Taxes?Tax Deductions Your cat isn't a dependent, but your guard dog might be a business expense. Here are the IRS rules for pet-related tax deductions in 2026.
-
Tax Season 2026 Is Here: 8 Big Changes to Know Before You FileTax Season Due to several major tax rule changes, your 2025 return might feel unfamiliar even if your income looks the same.
-
2026 State Tax Changes to Know Now: Is Your Tax Rate Lower?Tax Changes As a new year begins, taxpayers across the country are navigating a new round of state tax changes.
-
3 Major Changes to the 2026 Charitable DeductionTax Breaks About 144 million Americans might qualify for the 2026 universal charity deduction, while high earners face new IRS limits. Here's what to know.
-
Retirees in These 7 States Could Pay Less Property Taxes Next YearState Taxes Retirement property tax bills could be up to 65% cheaper for some older adults in 2026. Do you qualify?
