The addition "is" a property improvement in it's entirety. That includes floors, plumbing, wiring, painting, sidewalks, driveways, parking areas, the whole works.
It's all included in your cost basis for the entire house. Now since this is your primary residence, you will NOT be entering anything related to the addition as a business asset. It's just added to your cost basis for the house, which the program will be asking you for as you start the HO section.
