Capital Improvements and Cost Basis

When it is time to sell your home, taxes should be something you are considering. One of the key issues you will face is the basis of your home. The basis is the original price you paid. On top of this, you can add the cost of capital improvements. Capital improvements are things that do the property that permanently increase its value or lengthen its life. Examples include adding a room or deck, or upgrading the kitchen or bathroom. Make sure you keep records of all the capital improvement costs in case you get audited.