Dear Mrs. Lank: We moved to our first new home about eight months ago. Since then we did some home improvement projects that increased the value of the house, such as installing a cement sidewalk around the house (to make it accessible for some of our students — we are both teachers), installing an automated sprinkler system in the garden as well as hardwood floors and tiles in the house.

Can you tell us whether any of these house improvements (they are not repairs) are tax deductible? Could you point us to some IRS sources or other literature in that regard? — R.L.

Answer: Improvements to your own home are not tax-deductible. The money spent is added to your cost basis for the property, which may or not make a difference when you sell some day.

The fact that you see students at home brings up the question of a deduction for a home office. If there's space used exclusively for that, it might qualify. Then again, it might not, depending on the rest of your work situation. Discuss this with a tax professional.

Owner Holding Mortgage

Edith: What does it mean when the owner of a house will hold the mortgage? I have a chance to do this but I don't know what this entails and the difference with acquiring a mortgage the conventional way. — J.

Answer: It means the seller will lend you the money to buy the house. You'll get your loan from the seller instead of from a bank. Perhaps the seller wants a steady income for years ahead, instead of a lump sum today. Or maybe the seller fears the property's condition wouldn't meet the standards of a lending institution, or that a bank's appraiser wouldn't consider it worth what you're paying.

Advantages to you: You'll pay less in closing costs than you would with an institutional lender. You'll have a prompter, smoother path to settlement.

You won't have the protection of a bank's appraisal. Better make sure what you're paying is in line with recent sale prices of nearby similar property. If you're not already working with a real estate broker, you may find one to advise you for a reasonable fee. And make your purchase offer is subject to the receipt of a satisfactory report from a home inspector.

Then be sure your mortgage documents are subject to approval by your own attorney before you sign anything.

Non-Nup Pre-Nup

Ms. Lank: I own a home with another individual with whom I was engaged and then we separated. My name is still on the mortgage and I can't get the other person to sell or refinance. It's like I'm being held hostage. He has been behind numerous times and has totally messed up my credit. I know I am liable for the mortgage but he won't even move out so I can take over. I need to know if I could somehow sue him for not being in good faith and ruining my financial credit. I am afraid the house will be foreclosed on and I have tried everything. There is nothing I can do. — Via e-mail

Answer: You're wrong when you say that.

You should have had an attorney's guidance for the breakup, just as if it were a divorce, and that's what you need now. Discuss your options with a lawyer who specializes in real estate. I doubt if it's worth suing your ex. You don't need legal expenses, you might not win a judgment, he may not have any money anyhow, and there may not be much equity in the house. But you do have the right to force a sale of the property.

Let me know what happens; I'm interested. Mostly I'm printing your note to caution prospective homeowners: Anyone buying a house with a friend should have legal input at the start, or even better, before the start. A lawyer can help the partners with a written agreement ahead of time. That way everyone's interests are protected fairly if something goes wrong down the line. It'd be a sort of non-nup pre-nup.

Granddaughter Assuming Mortgage

Dear Edith: I would like my granddaughter to inherit, and live in my home on my death (or when I am no longer able to live there). I am 78 now. I'm currently paying on a small mortgage balance and home equity loan totaling $35,000. Can my granddaughter assume payments (with a legal agreement with lenders) or must she apply for a new mortgage in her name? If this is the case, is there a simple way to deal with current banks other than traditional application, appraisal, down payments, etc.? — R.K.

Answer: Lenders do not usually call in a loan when property is inherited by a family member.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at [email protected].