Message Font: Serif | Sans-Serif
No. of Recommendations: 0
[[Does this mean we can stop keeping track of our cost basis?]]

No...not officially.

Obviously, if you believe that you will NEVER go over the exclusion amount, and all of your gain would be excluded, keeping track of your additions to basis (in the form of improvements, etc) would be moot. All you would really need would be your purchase escrow and your sale escrow to prove that you did not exceed the exclusion amount.


What if you stay in the home for a long time and your gain EXCEEDS the exclusion amount? The only way that you'll get any tax relief is to take your original purchase price and increase that by the improvements that you make (and that you'll need records for if you want IRS to count 'em).

Or...more likely...what happens if the law changes? Or the exclusion amounts are dropped? Then what. If you can't prove your additions to your cost, you could get screwed BIG TIME.

Uncle Sammy would rather you not pay attention to that man standing begind the drapes. But for me...personally...I'm STILL going to track my additions to basis on my personal residence...just in case. It doesn't take that much time or paper.

TMF Taxes
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.