Hi all, this is my first time posting…but LONG time CH listener.
My parents sold their house last year and moved to senior apartments. They are afraid to do their taxes because they lost pretty much all of their home imporvemnt (and other) receipts due to water flooding their basement.
Since they built the house themselves and with some contractors back in '86-'87, they are missing a ton of records about the value of the house now and aren’t sure what they can do about capital gains. The house sold for about $750K.
I know they can try to get some corroboration from past contractors, maybe, possibly from neighbors, photos, etc. BUT that will be so darn tough and very incomplete.35 years ago is a loooong time to try and get records. Most companies aren’t in business anymore.
Good news: $500,000 of profit is excluded from capital gains taxes anyway. If it were me, and I was pretty sure my basis was more than $250,000, I’d just go ahead with that, paying no capital gains. It’s not like they have to show the IRS receipts to file the tax return.
It’s okay. Just sit down and come up with a reasonable basis What they paid for it plus
the improvements they can remember over the years and reasonable estimates of what they
paid.
Nobody is going to ask for receipts. Don’t worry about it
If they come up with a basis of 250k or more
they won’t owe any tax.
That’s very much what I was thinking. I have a Dad who’s very ‘by the book’ and is quite disturbed by all of this. You know, the ‘lay away all night and worry’ kind of guy.
Thank goodness, that’s my thoughts…it’s just hard to help a worry-wart who is a super rule-follower. I’ll pass this info along…thank you fuzzbutt! (super awesome name BTW!)
