Financial Planning for Generation X & Y Women
 
Notice: Because of a database server upgrade, this site may be partially non-functional from August 21st to August 22nd. No data will be lost. We apologize for any inconvenience.
Under slight reconstruction until 5PM CST today... Please excuse the dust!
Resource Center
Expert Q&A Archive Teleconference Call Archive Online Resources Federal Reserve Board Resources FPA Perspectives

Expert Q&A Archive

01/31/2008
How long should I keep records of my home improvements?
I was wondering about keeping records of home improvements to use to offset your capital gains when you sell the house. How long do you have to keep these records? For example, if I sell my house in 15 years, and I did capital improvements this year, can I still use that? Or is there a period of time closer to the period of sale that I have to stay within?
Rosemary Ervin, CPA:
expert info »
Records for capital improvements on personal residence must be retained until disposition of the residence. I advise clients to set up a folder when they purchase the residence. Name it: 29 State Street (the address). Put the purchase closing statement in the folder. Keep a sheet of paper on the inside of the folder:
2007: purchase price $xxx,xxx
2007: closing expenses $xxx,xxx
2007: improvements $xx,xxx
2008: improvements
2009 and so on.
If you keep this file current, when you sell the residence, you will know exactly what your investment in the residence is. Additionally, you will have all of the receipts in the folder.
Gail Rosen, CPA:
expert info »
There is no time limit. Keep all of the records on improvements you made to your residence.
Jody Rorick, CPA:
expert info »
You should keep your capital improvements records as long as you own the house, and then for 7 years after that, (for your tax return records) just to be safe. It doesn't matter how long ago you made the improvements, they still increase the basis. However, your detailed records should show any improvements that were destroyed later, too. For example, if you put in a
sliding door, and then 10 years later, took it out and put in French doors instead, you should remove the sliding door from your cost basis and add in the French doors.
 

Family Development & Resource Management
2251 TAMU | College Station, TX 77843-2251 | Map
Phone: (979) 845-3850 | Fax: (979) 845-6496 | E-mail:  fdrm@tamu.edu

Web Site Maintenance: Family & Consumer Sciences

All rights reserved