Can foreign taxes be deducted as an itemized deduction?
The foreign tax credit is only available for foreign taxes paid based on income. Therefore, foreign taxes paid based on property value can only be deducted as an itemized deduction.
Is a bathroom addition a capital improvement?
New bathroom addition would be considered a capital improvement and therefore capitalized and depreci ated and not deductible as rental expense. Depending on the cost, the taxpayer may be able to elect to expense the improvement but it would be limited to 2% of the basis of the rental property or $10,000.