What’s the difference between a repair and an improvement to your home? Actually, who cares? You should!
The tax law draws a line between repairs, which are considered non-deductible personal expenses, and improvements, which, though non-deductible, are added to the cost basis. It’s an important difference because expenditures that qualify as improvements cut the taxable gain when you sell the house. Uncle Sam helps to pay for improvements but not repairs.

To qualify as an improvement, the expense must add value to your home, prolong its life or adapt it to new uses. Adding a bathroom, a new deck or putting in new plumbing or wiring are examples of improvements. Repairs merely maintain your home’s condition. Replacing a broken window or painting a room would count as repairs. It’s important to keep detailed records if you think it might qualify as an improvement.