Page 1

Loading...
Tips: Click on articles from page
Page 1 3,755 views, 0 comment Write your comment | Print | Download
On real estate

Homeownership is a labor of love that carries a responsibility to maintain and upgrade as necessary over the years. Keeping records of what you do and when you did it can be helpful and save you money when it comes time to sell.

Keep a property file that won’t go to the shredder along with other tax receipts in 3 years. Property records for all capital improvements and repairs should be maintained as long as you own your home.

IRS tax rules let you add capital improvement expenses to the cost basis of your home at time of sale, lowering taxable capital gains. If you move frequently, it may not be worth the effort to track capital improvement expenses, but if you plan to live in your house a long time or make lots of upgrades, saving receipts is a smart move. The IRS defines a capital improvement as one which adds value to a home, prolongs its useful life, or adapts it to new uses. Page 9 of IRS Publication 523 has a list of eligible improvements.

There are limitations. The improvements must still be evident when you sell, so if you put in wall-towall carpeting 10 years ago and then replaced it with hardwood floors five years ago, you can’t count the carpeting as a capital improvement. Repairs like painting your house or fixing sagging gutters don’t count. The IRS describes repairs as things that are done to maintain a home’s good condition without adding value or prolonging its life.

Saving receipts for non-deductible property repairs can help you keep a home maintenance checklist schedule. Do you remember the last time you had your HVAC serviced? Or hired a chimney sweep to clean the fireplace? A wellorganized list of regularly scheduled property maintenance records will score points with homebuyers at time of sale.

Issues sometimes come up during property inspections, and having receipts for recent work done on the major systems of the home can come in handy. Keep all service contracts and warranties in the same property file in case you have to file a claim.

Because paper records and receipts fade with time and take up space, consider scanning and storing your property records on a flash drive or cloud based server. Digital copies are OK with the IRS as long as they are identical to the originals.

Tax season is right around the corner so as you file away last year’s receipts, take time to update your home maintenance records.

Adriana Donofrio Podley Properties Glendora (626) 926-9700 • adrianad@podley.com