Capital improvements lead to real estate tax breaks

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DEAR BOB: My late mother and I were joint tenants with right of survivorship for her house. It was her house, but her lawyer advised holding title in joint tenancy to avoid probate costs when she died. After title was transferred into my name, I decided to sell the house. But it required considerable fix-up work. I spent about $8,500 getting it ready for sale. The house really sparkled when the Realtor listed it for sale. To my surprise and pleasant shock, it sold for almost $7,000 above the asking price. My question is can I deduct the approximate $8,500 I spent on fix-up costs? – Andie H. DEAR ANDIE: No. But you can add those capital improvement costs to your adjusted cost basis for the home. Purchase Bob Bruss reports online. Please consult your tax adviser to determine your "stepped-up basis" for the house you inherited. To that amount, you can add the $8,500 capital improvements you made. Normally, if you had just spent a few hundred dollars on fix-up costs, there would ...