Does redesigning and replacing a deck, front steps, and all railings, constitute a permanent improvement to the property, or meerly a repair?

[Coleen3 · Accepted solution]

An improvement. You add the cost of capital improvements to your tax basis in the house. Your tax basis is the amount you'll subtract from the sales price to determine the amount of your profit. A capital improvement is something that adds value to your home, prolongs its life or adapts it to new uses.

The cost of repairs, on the other hand, is not added to your basis. Fixing a gutter, painting a room or replacing a window pane are examples of repairs rather than improvements.

Repairs are a deductible expense in the year paid for a rental, but unfortunately, never deductible for your personal home.