Capital improvements can be added to the cost basis of any asset, including a second home.
An improvement is something that extends the useful life of the asset or increases its value, in contrast to a repair which restores the asset to its previous value or condition. Improvements can include kitchen upgrades, new roof, new carpet, fixtures, and other things that become permanent parts of the property. (Not appliances, for instance.) The improvement must still be with the property when you sell; if you owned the house for 30 years and replaced the roof twice, only the second job adds to the value, the first does not since it was removed. Likewise carpets, windows, fixtures, etc. Some work may have both repair and improvement aspects. For example, if a tree branch falls through your roof, and you decide to replace the entire roof due to its age, part of the cost must be allocated to the repair of the storm damage, before you can count the rest as a capital improvement.
