Sale of Personal Residence-Accounting Required?

[zeros]

When a personal residence is sold, is any accounting of the profit/loss required. Does IRS require anything? What do you do?

[solomon]

If the exclusion is met and no 1099-S, do nothing.

[S T]

1099-s

I always report on Schedule D , my software figures the cost, expense and improvements, gives a worksheet, and has the option to report on Sched D with the Sect 121 Exclusion on the next line. You are not required to.

As far as recordkeeping, one hopes that the taxpayer has kept that information. Except for 25 - 50 years ago, I have escrow statements on purchase and usually refinances in my files, and then ask the taxpayer for a list of major home improvements over the years that they have held the property. Nothing required to be attached to the tax return.

I believe IRS will ony require cost basis plus improvements , if the tax return is subject to audit and that is one of the items.

Sandy

[wv112]

I tell my clients to keep up with all info regarding their personal residence because we never know when the tax law might be changed again.

[JAinNC]

I agree. Every homeowner should have a permanent folder to keep info on improvements,
easements.

[dyne]

Some time ago IRS issued a statement that taxpayers no longer were required to keep records of the basis of a personal residence. I consider that to be a mistake on their part.

[DMICPA]

House Sale

The tax authorities can go back until the date of purchase to determine basis. Taxpayer is on the hook to substantiate cost plus improvements.