Workbook — Real Estate · Created October 5, 2026 · 2 min read
Home Improvement & Basis Log
Capital improvements raise your cost basis. Repairs do not. This is the record that proves which was which.
When you sell, your taxable gain is the sale price minus your adjusted cost basis — and what you spent improving the house adds to that basis. Money you can prove you put in comes back out of the sale untaxed. Money you cannot prove does not.
What This Workbook Does
- Every line is logged with a category, a contractor and a receipt reference, then flagged capital or repair.
- The Basis Summary totals your adjusted cost basis: purchase price, qualifying closing costs, and capital improvements to date.
- It then runs the sale twice — once with your record, once without — and shows the difference in taxable gain and in tax.
How to Use It
- Log every dollar you spend on the house, on the day you spend it. A log filled in from memory five years later is worth very little.
- Pick a category from the list, and flag capital or repair. An improvement adds value, prolongs the life of the property, or adapts it to a new use; a repair keeps it in the condition it was already in.
- Keep the receipt reference in the column provided, and keep the receipt itself.
- Enter your purchase price and the closing costs that add to basis — title fees, transfer taxes, survey, recording. Not prepaid interest, insurance or escrow deposits.
- Read the Basis Summary any time you want to know what the record is worth.
What It Will Not Do
The capital-versus-repair split is a judgement call with real tax consequences, and an improvement you later tore out no longer counts. Confirm anything borderline with a CPA before you rely on it at sale.
Where to go next: The First Home Purchase — the section on starting this record at closing; Tax Strategies — where the gain exclusion sits in the wider picture; The Accidental Landlord — why the capital lines matter twice once a house is rented.