Repairs such as painting are not deducted from capital gains per se.
The
first thing to note is that expenses for making a house ready to sell can be
listed as selling expenses when you are trying to determine if you have a
profit and, if you do, how much. But it is important to note the
distinction between improvements on the one hand, and repairs and maintenance
on the other.. Improvements are more or less permanent changes to the
house. These get added to your basis. New tile would generally fall into
that category. But painting and general repairs are more likely to fall
under "repairs and maintenance." If you get the house sold
within a reasonable period of time (what is considered reasonable will depend
on a variety of factors), although they end up in a different category than do
improvements. You put them under costs of sale. There is a special
section in TurboTax where you get asked question about - and enter answers to
those questions - on this topic
