Publication 530 - Tax Information for Homeowners

Publication 530

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Recordkeeping

Keeping full and accurate records is vital to properly report your income and expenses, to support your deductions and credits, and to know the basis or adjusted basis of your home. These records include your purchase contract and settlement papers if you bought the property, or other objective evidence if you acquired it by gift, inheritance, or similar means. You should keep any receipts, canceled checks, and similar evidence for improvements or other additions to the basis. In addition, you should keep track of any decreases to the basis such as those listed in Table 3.

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How you keep records is up to you, but they must be clear and accurate and must be available to the IRS.

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You must keep your records for as long as they are important for meeting any provision of the federal tax law.

Keep records that support an item of income, a deduction, or a credit appearing on a return until the period of limitations for the return runs out. (A period of limitations is the period of time after which no legal action can be brought.) For assessment of tax you owe, this is generally 3 years from the date you filed the return. For filing a claim for credit or refund, this is generally 3 years from the date you filed the original return, or 2 years from the date you paid the tax, whichever is later. Returns filed before the due date are treated as filed on the due date.

You may need to keep records relating to the basis of property (discussed earlier) longer than for the period of limitations. Keep those records as long as they are important in figuring the basis of the original or replacement property. Generally, this means for as long as you own the property and, after you dispose of it, for the period of limitations that applies to you.

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Table 4. Record of Home Improvements

Keep this for your records. Also, keep receipts or other proof of improvements.

Remove from this record any improvements that are no longer part of your main home. For example, if you put wall-to-wall carpeting in your home and later replace it with new wall-to-wall carpeting, remove the cost of the first carpeting.
(a) Type of Improvement	(b) Date	(c) Amount	(a) Type of Improvement	(b) Date	(c) Amount
Additions:			Heating & Air Conditioning:
Bedroom			Heating system
Bathroom			Central air conditioning
Deck			Furnace
Garage			Duct work
Porch			Central humidifier
Patio			Filtration system
Storage shed			Other
Fireplace			Electrical:
Other			Electrical:
Lawn & Grounds:			Lighting fixtures
Lawn & Grounds:			Wiring upgrades
Landscaping			Other
Driveway			Plumbing:
Walkway			Plumbing:
Fences			Water heater
Retaining wall			Soft water system
Sprinkler system			Filtration system
Swimming pool			Other
Exterior lighting			Insulation:
Other			Insulation:
Communications:			Attic
Communications:			Walls
Satellite dish			Floors
Intercom			Pipes and duct work
Security system			Other
Other
Miscellaneous:			Interior Improvements:
Storm windows and doors			Built-in appliances
Roof			Kitchen modernization
Central vacuum			Bathroom modernization
Other			Flooring
			Wall-to-wall carpeting
			Other

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Keeping Records(p11)

How to keep records.(p11)

How long to keep records.(p11)