Taxes & Insurance

A capital improvement to your home may be partially tax-deductible, if it is made to alleviate a specific health condition. For example, suppose your doctor tells you to install central air conditioning to help you cope with asthma, allergies or respiratory problems. You spend $35,000 installing the system.

A local real estate broker might provide a letter saying that your house, which was worth $200,000 previously, is now worth $225,000 as a result of the improvement. Because you spent $35,000 and your house appreciated by $25,000, you can use the other $10,000 as an itemized medical deduction.

Such an expense may put you over the 7.5 percent threshold for deducting medical expenses. What