Tax Deduction for Homeowners from the IRS -The Internal Revenue Service- has concluded that a landlord or a homeowner with a home business who needs to have mold remediation performed at their home is tax deductible as an ordinary and necessary business expense.
It qualifies as a repair that has to be done to protect the investment of your home and business. Renovations that increase the value of your home can’t be counted as business expenses.
Mold remediation does not add value to the property, so it is tax deductible.
Mold remediation is necessary because the health of you, your employees, or your tenants would be affected if not performed, thus affecting the cash flow into your home business. Only the mold remediation is deductible, not any upgrades or renovations to the property.
The total cost of the mold remediation project, including any pre or post-testing, is what you would declare as your deduction at the end of the year. In addition, any building materials that you have to purchase after the mold remediation is tax deductible too. These are necessary to complete the repairs caused by the mold in the first place. It’s also possible that relocation expenses for you, your family, or your tenants may be deductible as well.
Check with your tax advisor and ask them if these costs could be deductible. With all the talk about mold being the kiss of death in real estate transactions, it’s good to know that there actually is an economical advantage to a moldy situation.