Capital improvements made over the years to a primary home add to the cost basis of the home to calculate the gain or loss on the sale. Gains on the sale of a primary home are eligible for an exclusion of up to $250,000 for a single or head-of-household owner or $500,000 for a married couple filing a joint return. The exclusion presupposes that you have lived in your primary home for a least 2 of the preceding 5 years.
If you do not qualify for the exclusion due to the time requirement then any gain would be taxable. Losses on personal property sold such as your primary residence are not deductible.
Capital improvements that add to the value of your property, prolong its life, or adapt it to new uses would include things like:
- Remodels and room additions (including decks and porches)
- New or upgraded landscaping, irrigation, and sprinkler system
- Hardscape such as pavement, block or retaining wall, patio
- Fencing
- Swimming pool, spa
- Storm windows, doors
- New roof
- Central vacuum or security system
- Upgraded wiring, plumbing, and ductwork
- Central heating, AC, humidifier
- New furnace, water heater
- Filtration, soft-water, or septic system
- Built-in appliances
- New flooring or wall-to-wall carpeting
- Upgraded insulation
- Satellite dish
The FAQ referenced below should also assist you in the information about home improvements
Home Improvements
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