donheff
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
An ongoing thread on tracking the cost basis of investments got me thinking about my two houses. DW and I hope to die in our primary residence so it will simply get upgraded to market value at the time, easy peasy for our heirs I hope. But there is a good chance that we will sell our weekend place in ten years or so and will have to pay capital gains. How detailed does IRS demand the records to be? We have solid info on the initial land purchase and the home loan to build the place and build a pool. But the documents on some upgrades (landscapping, rip rap) are sketchy. Also, the original rip-rap (erosion protection) was faulty and I had a talented friend redo it. Is that maintenance or an upgrade. His documentation was even more sketchy. He also replaced all of our windows (also a faulty original choice) - maintenance or upgrade?
So what is the verdict? Just make a good faith estimate and pay the taxes you think are fair? Go very conservative with only what you can prove? How does IRS treat sketchy cost documentation?
So what is the verdict? Just make a good faith estimate and pay the taxes you think are fair? Go very conservative with only what you can prove? How does IRS treat sketchy cost documentation?