When you purchased the microwave, a few years ago, you made a decision to expense it or capitalize (depreciate) it. If you expensed it (deducted the cost) (and you most likely did) back then, you do not now add it back to your cost basis as an "improvement". You alredy got your deduction, back then. You don't get another one, now (by adding to your cost basis). If you depreciated it, you do add it back, to your cost basis, as an improvement.* But, you also have to recapture the depreciation allowed.
*Instead of adding to your total cost basis, you could show it as the sale of a separte asset.
