Capital improvements made to a principal residence are not tax deductible. Instead, they are added to the basis of the home (usually what you paid for it). This increased basis serves to reduce the amount of gain that results when the home is sold. However, certain energy-related improvement may entitle you to a tax credit now.
Increase in value of property due to market conditions. When you sell appreciated property, you pay tax on the appreciation since the date of purchase. When you donate appreciated property held long term, you may generally deduct the appreciated value.