### What is considered a capital improvement? - [x] Installing new windows - [ ] Painting the exterior of a house - [x] Building a new deck - [ ] Repairing a roof > **Explanation:** Capital improvements refer to permanent structural additions or modifications to a property that improve its quality, add significant value, prolong its useful life, and are affixed in such a manner that removal would cause substantial damage. Installing new windows and building a new deck qualify as capital improvements, whereas painting and repairing a roof are considered maintenance. ### Which of the following would NOT be classified as a capital improvement? - [ ] Installing a privacy fence - [ ] Adding a new in-ground pool - [ ] Replacing the roof - [x] Painting the living room > **Explanation:** Capital improvements are modifications or additions that add significant value to the property and have a long useful life. Painting the living room is considered regular maintenance and does not qualify as a capital improvement. ### Why are capital improvements often confused with maintenance projects? - [x] Both involve property modifications - [ ] Both use similar materials - [ ] Both are usually carried out by professionals - [ ] Both always increase the property value > **Explanation:** Capital improvements and typical maintenance projects can both involve property modifications, making them easy to confuse. However, maintenance works like painting or repairing do not add significant value or prolong the property's useful life, unlike capital improvements. ### Which of these is an example of a municipal-level capital improvement? - [ ] Repairing potholes in city streets - [x] Building a new public park - [ ] Repainting crosswalks - [ ] Setting up temporary event stages > **Explanation:** Municipal capital improvements are investments made by local governments to enhance the value and usability of public facilities. Building a new public park is an example of such a capital improvement, while repairing potholes or repainting crosswalks are considered maintenance activities. ### What criteria must a property modification meet to be considered a capital improvement? - [x] Adds significant value, prolongs life, and is permanently affixed - [ ] Must be completed within a year - [ ] Costs more than $10,000 - [ ] Does not require professional assistance > **Explanation:** For a modification to be classified as a capital improvement, it must add significant value to the property, prolong its useful life, and must be permanently affixed such that removal would cause substantial damage. Duration, cost, and requirement of professional assistance do not define capital improvements. ### What distinguishes capital improvements from appliance installations? - [x] Appliances can be easily removed without structural damage - [ ] Appliances are always more expensive - [ ] Appliances do not add value to the property - [ ] Appliances must be installed by professionals > **Explanation:** While capital improvements are permanent modifications to a property, appliances do not become permanent fixtures and can be easily removed without causing structural damage. Therefore, they do not qualify as capital improvements. ### Which modification type could prolong the useful life of a property? - [x] Replacing the roof - [ ] Repairing a dishwasher - [ ] Lawn mowing - [ ] Changing interior decor > **Explanation:** Replacing the roof is considered a capital improvement because it prolongs the useful life of the property. Routine tasks such as lawn mowing or decor changes do not qualify as capital improvements. ### Are installations of burglar alarms considered capital improvements? - [x] Yes, they are permanent fixtures improving property value - [ ] No, they are considered maintenance tasks - [ ] No, because they do not affect structural integrity - [ ] Yes, since they are appliances > **Explanation:** Installing burglar alarms is considered a capital improvement as they become permanent fixtures that enhance the security and value of the property. ### Which of the following statements is TRUE about capital improvements? - [ ] They are always visible from the exterior - [ ] They can be easily undone without any damage - [x] They add significant value to the property - [ ] They are only done indoors > **Explanation:** Capital improvements add significant value to a property, which can be done either indoors or outdoors, but are not characterized by ease of removal or visibility from the exterior. ### Does painting the house fall under capital improvement? - [ ] Yes - [x] No > **Explanation:** Painting the house is not considered a capital improvement. It is classified as maintenance work because it does not add significant value or prolong the life of the property.