Does the Capital gains tax take into consideration any improvements made to a purchase amount?

Question

I bought a 5 acre piece of property over 30 years ago and have spent more on Improvements over the years (access road, Underground utilities, well construction, etc.) I see when calculating Capital gains that the amount to be taxed is based on the income tax bracket, purchase price and selling price. I have spent much more on improvements than the purchase price. Can I also deduct those improvements from the selling price to calculate the capital gains tax?

Anonymous · Accepted Answer

Improvements (not repairs/maintenance) are added to the cost basis thereby reducing capital gain.

If there is a home on the land and it's been your personal residence for two of the past five years, the first 250k of your capital gains is exempt from tax.   If you're married, it's 500k.

? · Answer

yes you get to deduct your documented improvements

Max Hoopla · Answer

Improvements become part of the basis in the property.

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Does the Capital gains tax take into consideration any improvements made to a purchase amount?

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