How far back can home improvement expenses associated with selling a home be still deductible? From what date do we count back from: listing date, sales date, or ?

[jroughgarden]

I can't add details, but would really appreciate a full explanation.

[Hal_Al · Accepted solution]

All home Improvements, over the years, no matter how far back,  are added to your original purchase price to form your adjusted cost basis.  Past repairs, as opposed to improvements, may not be added to your cost basis. Painting is considered a repair, not an improvement.. New carpeting or a new roof is an improvement.

Your may also add repairs that were done as fix up expenses to get the property ready to see; but only repairs done just prior to sale (not past expenses). There is no firm rule on what date that is measured from. Anything done in the year of sale probably qualifies. Anything done in the prior year, but after the listing date probably qualifies.

Your capital gain on the sale is your sale price minus your adjusted cost basis minus any expenses of sale (e.g. real estate commission).

[Hal_Al]

For details, see <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p523.pdf">https://www.irs.gov/pub/irs-pdf/p523.pdf</a>

[TaxGuyBill]

Just to clarify:  Improvements that have not been replaced can be added to the purchase price to form your Adjusted Cost Basis.

If you replaced a roof 20 years ago for $2000, that would be added to your Basis.  If you re-replaced the roof last year for $10,000, you ONLY add the $10,000 improvement, you don't also add the $2000 that was replaced.