Hello Lisa, welcome to Just Answer.
Improvements made to your residence are not deductible in the year that you make them. If they are capital improvements/additions/renovations, then the cost may be added to the basis of your home and may reduce any capital gain when you sell. If you use part of your home for business purpose, then the improvements may be partially deductible.
In addition, if you made any energy star improvements in 2007, such as windows, exterior doors, gas furnace, boiler, solar panels, insulation, then you may be eligible for the Residential Energy Credit.
Regarding the retirement funds distirbution, any pre-tax portion of his distribution will be taxable, and subject to the 10% early withdrawal penalty if he is under 59 1/2, unless a specific exception applies. There is no exception for home improvements.
Let me know if you need any additional information.