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Level 2
posted Feb 16, 2024 3:17:43 PM

With home sale, any reason to add improvements to cost basis if already under capital gains limit?

We sold our home this year.  Sale price - closing costs - purchase price is below the capital gains limit.  However, we did make $50k in improvements to the house.  Is there any advantage to including those in my tax return?  I don't want to increase my audit risk or anything like that for no reason.

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1 Replies
Expert Alumni
Feb 16, 2024 3:30:39 PM

No, you do not have to add any home improvements to the costs basis of your home.  You should keep any receipts that you may have for those improvements with your tax records/sale of your home.