Property Upgrades

[gregdawn7]

When selling a primary home what property upgrades can be used to offset any capital gains. My home was purchased in 1974 for $56,000 and now is valued at $950,000 - a $894,000 value increase.  I know I can deduct $500,000 (for my wife and I) leaving a $394,000 taxable gain. During the 48 years we have lived there we have added patios, retaining walls, block walls, new roof etc.  What can be deducted and what proof is needed for these expenses over the 48 years?

[jkellett2]

The items you mentioned would qualify as home improvements.

To qualify as an increase in the adjusted basis when you sell, the home improvement must:

• Add materially to the value of your home; or
• Prolong your home's useful life significantly; or
• Adapt your home to new use

You can use purchase orders, receipts, cancelled checks, and any other documentation you receive as proof of your expenditures.