Deductibility of Seller Concession for Repairs on Partial Rental Sale

[Rick]

Person sells a house that had been used as a partial rental. That is, he
lived in the home but rented out the upstairs portion (approximately 40% of
the house living space) to two tenants. He always reported rental income
and included a prorated portion (40%) of general house repairs as rental
expenses.

The buyer's inspector identified some repairs and the buyer agreed to
provide a seller's concession credit in the closing for the cost of these
repairs. Can he deduct 40% of these repairs as rental expenses as he always
did in the past? Does it matter that the last renters moved out a few weeks
before the close date?

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[Rick]

Correction - in previous post, it should state that SELLER agreed to provide

a seller's concession credit

[ira smilovitz]

On Friday, September 16, 2016 at 2:17:31 PM UTC-4, Rick wrote:
> Correction - in previous post, it should state that SELLER agreed to provide
> a seller's concession credit
>
> --

No. A seller's concession credit is a reduction in sales price. This adjusts the gain/loss on the sale. It isn't an expense.

Ira Smilovitz, EA

[lotax]

Rick: Was there depreciation "allowed or allowable" during the rental period?