was your mom co-owner or did she inherit the property from her spouse? as co-owner 50% of the basis would be Fair Market Value on the date her spouse died. her basis in the other 50% would be cost + 50% of the improvements made before he died. after that add 100% of the cost of improvements. if she inherited 100% then is the fair market value on the date of death plus the cost of subsequent improvements. certain rules apply as to whether improvements add to the basis. In order to add to the tax basis, an improvement must adapt the home or part of the home to a new use, prolong your home’s useful life or add to the value of your home. Unless the improvement meets one of these criteria, you can’t include the cost.
