Say I bought a house to renovate then sell at a profit. If I need a particular job done involving $1000 in labor cost and hire a contractor to perform the work I can then add that cost to the cost basis of the house and avoid capital gains tax on that charge. If I do the work myself I cannot add that labor value to the cost basis thus, in effect, paying $150 tax (capital gains rate of 15%) on my worthless labor. Since my labor is valueless from a cost basis perspective in this instance how, then, can my labor suddenly be of value as regards earned income?
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- Thread starter tIUguy
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