The cost of an improvement made to extend the useful life of a property or to add to its value, such as adding a room. The cost of repairing a property is not a capital expenditure. Capital expenditures are depreciated over their useful life; repairs are subtracted from income for the current year. Examples include a new roof, tenant improvements, or a parking lot. Such items are added to the basis of the property and can be depreciated over the holding period or the useful life of the improvement.