There is a difference between a capital improvement that increases your home’s value and repairs such as painting your house, and whether you can deduct these costs when the purpose is to sell your home has to do with timing. The source on the IRS website is below but first here is some clarification about repairs and cost basis:
Most repairs that return your home to its original condition won’t increase your cost basis. Improvements that last more than a year and add value to home do increase your home's basis, however, as long as they are still apparent when your home is sold. An example of this would be a home remodel project. Let's say you paint your home while you live there. That does not count because it is maintenance and restores it to the original form. You refinish the floor - it also doesn't count. However if you refinish the basement, then the paint and flooring that you buy for the project does count because it is part of the remodel. Remodeling increases the basis of the property.
When you do repairs (home improvements) that would be considered maintenance because you want to sell the home, it's different. In this case, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing. The timing is very important.
Here is the source on the IRS website, Pub 530:
Improvements.
An improvement materially adds to the value of your home, considerably prolongs its useful life, or adapts it to new uses. You must add the cost of any improvements to the basis of your home. You can't deduct these costs.
Improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, and paving your driveway.
Amount added to basis.
The amount you add to your basis for improvements is your actual cost. This includes all costs for material and labor, except your own labor, and all expenses related to the improvement. For example, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence.
You must also add to your basis state and local assessments for improvements such as streets and sidewalks if they increase the value of the property. These assessments are discussed earlier under State and Local Real Estate Taxes .
Improvements no longer part of home.
Your home's adjusted basis doesn't include the cost of any improvements that are replaced and are no longer part of the home.
Example.
You put wall-to-wall carpeting in your home 15 years ago. Later, you replaced that carpeting with new wall-to-wall carpeting. The cost of the old carpeting you replaced is no longer part of your home's adjusted basis.
Repairs versus improvements.
A repair keeps your home in an ordinary, efficient operating condition. It doesn't add to the value of your home or prolong its life. Repairs include repainting your home inside or outside, fixing your gutters or floors, fixing leaks or plastering, and replacing broken window panes. You can't deduct repair costs and generally can't add them to the basis of your home.
However, repairs that are done as part of an extensive remodeling or restoration of your home are considered improvements. You add them to the basis of your home.
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