One of the biggest deciding factors for having Sligo listed as an historic property was to try and take advantage of the rehabilitation tax credits provided at both the state and national level. Considering the scope of work needed to make Sligo a livable space any little bit of reimbursement would be helpful in mitigating the costs. At the state level I believe the percentage is 25% of qualifying expenses and at the national level I believe the percentage is 20% of qualifying expenses. In a perfect world one could claim 45% total in tax credits but our world is far from perfect. The national tax credits can only be applied if the property is income producing so that makes it a little more complicated considering we have claimed the main floors of the house as our own, single-family dwelling (for now…more on that later).
We knew enough to keep all of the receipts and invoices from the project which we did with a very systematic approach of stuffing everything into one folder. What I wish we knew, and I am certain Marcus would agree, is that we needed to keep every receipt and invoice along with how they were paid. So, for example, if we went to Lowes and purchased $2.00 worth of screws (and don’t go laughing at me because I’m ignorant to the price of screws and stupid, woman don’t you know screws cost at least double that this is just a hypothetical situation so calm down) we needed to be able to show from which account we purchased said $2.00 worth of screws. If you’re like Marcus and I, between the two of us, we have about six different accounts a purchase could have been made, including major credit cards. Keep reading and I’ll give you our social security numbers next!
Marcus took on the task of sorting through the receipts, pulling account statements, and generating a massive Excel spreadsheet all while using what we fondly refer to as “Franken-computer” which is a laptop whose basic function now is merely for the computer itself while every other aspect has been outsourced with a separate monitor and keyboard. We have another laptop which is what I am currently using but it’s painfully slow. When it comes to electronics (and cars and phones) we are not up-to-date in the slightest. This is all to say that the task of sorting through 2 years of receipts and accounts was made all the more difficult by our current computer situation.
Finally, after all of that, we Marcus has the spreadsheet ready to go to the accountant who, in this case, specializes in Virginia historic tax credits. We are hoping to get all of the state tax credits back and expect a portion of the national tax credits back for the basement which is a rental unit and therefore income producing. Which brings me to my “more on that later” comment which is this: Who wants to rent a three bedroom, roughly 3,000 square foot historic home for three years? Because *drumroll please* we are moving to Singapore!
