Repair or Improvement???

[dbryan]

I purchased a foreclosured condo earlier this year. The entire kitchen had been removed, the back door kicked in, carpet destroyed, etc... I spent about $8k to make the condo livable. I think the answer is improvement but wanted other opinions.

Also, I bought the condo for much cheaper than the tax assessment. Do I have to use what I paid as the Fair Market Value? Or, can I use the tax assessment?

Thanks.
Dave