Ana Docoito-Nelson serves as a property manager for Gramatan Management, Inc., in New Rochelle, New York. As such, she oversees daily operations for the company’s properties and handles community emergencies. Furthermore, Ana Docoito-Nelson improves property values through capital improvements.
Capital improvements are property restorations or the addition of a permanent structural change to a property that adapts it to new uses, expands its useful life, or increases its overall value. According to the Internal Revenue Service, capital improvements must have a life expectancy of at least a year when installed, and they can be included in a property’s cost basis, thus reducing the taxable capital gain if property owners sell the property.
The distinction between a capital improvement and a repair often comes down to the impact the project has on the property in the future. Repairs are necessary to keep properties in good condition and may include such things as fixing leaks or painting the building. These types of projects are not included in the cost basis unless they increase the value of the property. Capital improvements, by contrast, must be a permanent part of the property; if removed, they would damage the property. A new hot water heater or kitchen cabinets are examples of capital improvements.