For major home improvements like a new deck, you don't have to separate the value of the old deck from the home itself. The benefit of the improvement comes when you sell the house because the amount you spend to build the new deck will offset your capital gains tax. You pay capital gains tax on the difference between your "adjusted basis" and your sale price. The basis is your purchase price, and the deck is part of the adjustment. The house minus the deck cost is the adjusted basis. As an example, if you bought the house for $200,000 and sell for $250,000, that's $50,000 in gain. If you spent $10,000 on the deck, you subtract that so there's only $40,000 in profit that you would pay tax on. That's your adjusted basis.
