### Question
How does the law define separate improvement?


### Answer
Under *26 U.S.C. § 1250*, **separate improvement** is defined as:

> each improvement added during the 36–month period ending on the last day of any taxable year to the capital account for the property, but only if the sum of the amounts added to such account during such period exceeds the greatest of—


(i) 25 percent of the adjusted basis of the property,


(ii) 10 percent of the adjusted basis of the property, determined without regard to the adjustments provided in paragraphs (2) and (3) of section 1016(a), or


(iii) $5,000

#### Citation:
  - *26 U.S.C. § 1250*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART IV-SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES**

