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J
jpbruno
February 21, 2023
Question

Is a capital improvement rebate (replaced my furnace and added central air conditioning) considered taxable income and do I need to report it?

  • February 21, 2023
  • 2 replies
  • 0 views
I received a cash rebate for capital improvements. Do I need to report the cash amount on my 2022 state and federal tax returns?

2 replies

M
MinhT1
February 21, 2023

No.

 

The rebate is considered as a reduction of your purchase price.

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O
Opus 17
Employee
February 21, 2023

It's not taxable income, it's a reduction of the cost.

 

If you are claiming energy saving credits, or the property is used as a rental and you must depreciate the property as an asset, you would use the lower cost to calculate the credit or the depreciation. 

 

It would only ever be taxable income if the amount of the rebate was more than you paid for the property. 

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