TMFPMarti,You wrote, Before the law changed in 1997 you could include fixup expenses in determining how much you had to spend on a replacement residence, but the whole concept of replacement disappeared in that change in the law.I just went and read the relevant section in Pub 523. According to it, the cost basis is important. See page 8:Increases to BasisThese include the following.o Additions and other improvements that have a useful life of more than 1 year.o Special assessments for local improvements.o Amounts you spent after a casualty to restore damaged property.And elsewhere there are the reasons why some or all of your gain may not be tax exempt, which is why determining your cost basis was important in the first place.Actually from the definitions in Pub 523, all of my changes and improvements may add to my cost basis. They all have a useful life of more than 1 year. There are several reasons I might need to know this basis when I sell:1. I might convert the property to a rental; 2. I might need to sell the house before 2 years are up;3. This exemption may be sunset or eliminated before I sell; and,4. Housing inflation could increase the value of the house by more than $250,000 in the next 10 years. (It could happen...)OK, none of these are LIKELY to apply to me; but any of them could before I move out.- Joel
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. M