No. Instead the cost of home improvements increases the basis in your home to lower your overall gain (or increase a loss) on the sale. Unfortunately, this will not be of any benefit, if you are either taking the home gain exclusion or have a loss on the sale of your home. (The IRS does not allow the recognition of a capital loss on the sale of a personal use property.)
Please note -
You do not need to enter or report the sale of your
primary residence if:
- You never used your primary
residence as a rental or took home office deduction
- You have a loss on the sale
of your home (Personal capital losses are not reported on your tax return)
- You did not receive a Form
1099-S and
- You meet the home gain
exclusion (see below)
You can take the gain exclusion as
long as you considered the home your "primary residence" for 2 of the
last 5 years. If you have a capital
gain from the sale of your main home, you may qualify to exclude up to $250,000
of that gain from your income. You may qualify to exclude up to $500,000 of
that gain if you file a joint return with your spouse. See Sale of Your Home for more information on the exclusion.
