Home Improvement Receipts for taxes when sold a house

[WinniWoman]

So we actually have like 32 years worth of home improvement receipts. As we just recently sold our home, do we really have to go through every one of these and add them up for our 2019 tax return? Seems crazy! Meeting with a new accountant on Tuesday and not sure what I will need to do regarding this.

I am sure we must have at least $200,000 (probably more), but I cannot fathom going through every receipt!

 

[AnnaS]

Curious what the accountant tells you. Maybe you give him a rough estimate and keep those receipts "just in case" audited? Do all the receipts/home improvements qualify for write-off?

Is this to reduce the capital gains on your previous home?

 

[needvaca]

Married couples get an exemption of $500,000 of capital gains on their house. Did you have a bigger gain than that?

 

[pittle]

We have done that before, but did not need to send the actual receipts because we did not exceed the maximum amount. I always put the reciepts in an expandable folder so they were at least available. When we bought this house in 2008, I started a spreadsheet called Improvements for the House. I numbered all of the receipts and entered that number along with this information on each line.

#

Date

Item

Place

Amount

Cash

Credit

Now 12 years later, I have a running total and can find a receipt if needed. I have printed this list and keep it in a folder. The receipts are stapled into grouts of 10 so they are easy to find. This will not help you now, but start for your new house. Our house was a foreclosure and the previous owners took a lot of things like faucets, light fixtures, built-in appliances, etc, so our list is long and there are many expensive items on it. I just wanted to know how much we did spend on this house. I still keep adding when we do make improvements.

I did this when I was the Church Treasurer during a remodel in 2006 so that I could account for every penny easily to report to the church. It worked so well that I did it for home.

 

[wilma]

Not sure why you would be doing this unless you had more than 500,000 in capital gains from the sale of your house??

 

[WinniWoman]

Married couples get an exemption of $500,000 of capital gains on their house. Did you have a bigger gain than that?

Oh gosh no! So I guess I don't even need the receipts then. We saved them for nothing! Can't even burn them now- no fireplace. LOL!

We paid $207,943 for our former home 32 years ago and sold it for $317,000 and now paid $274,427 for our new home.

 

[Talent312]

I hang onto receipts only for potential warranty claims.
But once those expire, they get shredded (if I see 'em).

In the last 2 years, we installed a roof, AC system, kitchen w/appliances, and sewer line.
So those will stick around a while.
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From www.IRS.gov - TopicNo.701 - Sale of Your Home
If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse. Publication 523, Selling Your Home provides rules and worksheets.

Qualifying for the Exclusion
In general, to qualify for the Section 121 exclusion, you must meet both the ownership test and the use test. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale... Generally, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. Refer to Publication 523 for the complete eligibility requirements, limitations on the exclusion amount, and exceptions to the two-year rule.

Reporting the Sale
If you receive an informational income-reporting document such as Form 1099-S, Proceeds From Real Estate Transactions (PDF), you must report the sale of the home even if the gain from the sale is excludable. Additionally, you must report the sale of the home, if you can't exclude all of your capital gain from income. Use Schedule D (Form 1040 or 1040-SR), Capital Gains and Losses (PDF) and Form 8949, Sales and Other Dispositions of Capital Assets (PDF) when required to report the home sale. Refer to Publication 523 for the rules on reporting your sale on your income tax return.

.

 

[isisdave]

Not unless NY has lower limits, but I doubt they do.

 

[slip]

Just had my taxes done here and it included the sale of my house in Wisconsin. I gave him all the closing information. He added it to the form and it came out to zero. He told me it would before we even started.

I was late doing mine this year. Just kept putting it off. It was pretty painless and he did them in less than an hour. I didn’t have to file in Hawaii this year since my company kept taking Wisconsin taxes out instead of Hawaii. I got them to finally correct that at the end of January. So my first filing in Hawaii will be next year. He said there shouldn't be much difference.