Tax Time will soon be here. Time to get your records in shape
Your home records are very important when determining the basis or adjusted basis of your home. This information can determine whether you have a gain or a loss, When it comes time to sell your home, this information is important to to figure depreciation if you use part of the home for business purposes or rent.
What should records show??
Well, the records should show the purchase price, settlement or closing costs of any improvements made to the home. Records showing any casualty losses deducted and insurance reimbursements for these losses are needed, too!.
If you postponed the taxes on the gain from a sale of a previous home, Form 2110, Sale of Your Home should be included in your records.
Remember, when you sell your home your records should show the sales price and the selling expenses, such as commissions.
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