Question: In 2003, Tara and DJ, spouses, bought a cabin about two hours from their hometown. Over the years, they shared many stories with you about spending summers fishing and winters skiing, and how this place has been such a hidden treasure to the family. This year, at their regular scheduled appointment, they told you they sold the cabin for more than they ever expected. DJ prepared an Excel spreadsheet listing the various improvements and costs for the cabin, with one item listed as mileage. Can the taxpayers add their mileage for routine maintenance trips over the years to the cost basis of the cabin?
Answer: No. The mileage to maintain a personal asset cannot be added to its basis. When sold, personal assets are either reported as a taxable gain or as a nondeductible loss. Costs to improve a personal asset can be added to the basis while expenses to maintain it are considered personal and nondeductible.
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Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.