Is adding solar panels considered a permanent improvement when selling my home?

Forum|Forum|5 months ago
April 8, 2026
1 reply
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I've added a patio, pool and solar panels to my home that I sold. How is this recorded in my taxes? The page gives me $ permanent improvements and Cost of home additions (materials and labor). How do I record this?

TurboTax Online

LindaS5247

Level 14

Yes, adding solar panels, a pool, and a patio are considered to be capital improvements (permanent improvements) because they increase the value of your home and prolong it's life. These costs are added to your home's cost basis, which reduces any potential capital gains taxes when you sell your house.

The formula is: Original Purchase Price + Cost of Improvements = Adjusted Basis.

When you make a home improvement, you can't deduct the cost in the year you pay for the improvements, but, if you keep track of those expenses, they can help you reduce your taxes in the year that you sell your house.

For tax purposes, you would treat these expenses as increases to your cost basis of your home. You would add together the total cost of the solar panels, pool, and patio (materials + labor).

Keep all receipts, invoices, and records of payment for your tax records when you sell your house.

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