Does pool remodel add to home basis?

[bobweissman]

I am in the process of renovating my home in-ground swimming pool. It's a complete remodel, jackhammering plaster down to gunite, installing new tile & plaster, and all new  equipment (filter, heater, pump, electronics). The pool was built by my home's original owner in 1988 and was in pretty bad shape from 30 years of wear & tear.

This is a 5-figure project (not to mention a serious headache).

Do my out of pocket expenses for this project add to my home's basis in the same way a new roof would? How about the 40,000 gallons of water I had to replace?

[pk · Accepted solution]

All physical improvements add to the  owner's basis, assuming that it raises the FMV of the asset as compared to FMV just prior to the action