capital improvements

An addition or alteration to property that adds to its value.

According to the IRS, a real property capital improvement includes:

  • Fixing a defect or design flaw
  • Creating an addition, physical enlargement or expansion
  • Creating an increase in capacity, productivity or efficiency
  • Rebuilding property after the end of its economic useful life
  • Replacing a major component or structural part of the property
  • Adapting property to a new or different use
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