You want to keep track of all of those costs. You can't itemize or deduct casualty losses unless the loss is caused by a federally declared disaster or a significant fire. However, those home improvements may come into play when you sell your home because they're included in your home's adjusted cost basis. That is your original cost plus:
From that upwardly adjusted basis, subtract:
- Certain settlement fees or closing costs
- Depreciation allowed for any business use portion of your home
- Residential energy credits claimed for capital improvements
- Payments received for easements or right-of-ways
- Insurance reimbursements for casualty losses
- Casualty losses (from accidents and natural disasters) that you deducted on your tax return
- Adoption credits or nontaxable adoption assistance payments for improvements added to the basis of your home
- First-time homebuyer credit
- Energy conservation subsidies excluded from your gross income
- Any mortgage debt on your principal residence that was discharged after 2006, if you excluded this amount from your gross income.
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