Can you replace the bad boards and repaint? 

If it's minor and cosmetic, as in cleanup and repainting, it is deducted as repairs.

we rented it out again quickly but had to repaint everything and quite a few repairs. 

I'll just be re-painting them. 

I am repainting all walls and other minor fixes. 

The furniture will soak it up and every flop into the sofa will send a puff of soot into your home for as long as the furniture is there.In my case, the insurance covered cleaning and repainting every wall and ceiling surface in the house, including the upstairs.

I do have to say that removing, cleaning, repainting, and rehanging kitchen cabinets was not as easy as we had thought.

It's possible you could add a lot of value if you attracted one of the few potential buyers who are interested in it... but it's a very limited pool and your money would be better spent improving the property to the tastes of the majority of the buyer pool (repaint, curb appeal, kitchen remodel, bedroom conversion, etc).

We did everything listed by others above -- Repaint the entire house with 3 coats of oil-based kills, empty the house and scrub it down with smoke killing cleaners, repaint cabinets, replace all fixtures and appliances, full ozone treatment -- It got better in the beginning but as time passed the smoke smell came back. 

Even if the tenant only stays for six months you will more than likely need to repaint it and probably even replace the carpets, replace doors, repair in holes in walls, deal with police eventually, etc.