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How do determine adjusted basis in property when client has not kept records of capital improvements?

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last updated ‎December 07, 2019 6:51 AM

How do you determine gain or loss on sale of property when client does not have records of capital improvements

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Level 8
last updated ‎December 07, 2019 6:51 AM

It would be improper to increase the basis in property without any substantiation.  You need to help you client substantiate any increases in basis that would be appropriate.

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Level 8
last updated ‎December 07, 2019 6:51 AM

It would be improper to increase the basis in property without any substantiation.  You need to help you client substantiate any increases in basis that would be appropriate.

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Level 10
last updated ‎December 07, 2019 6:51 AM

No records equals zero basis.

** I'm still a champion... of the world! Even without The Lounge.
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Level 14
last updated ‎December 07, 2019 6:51 AM
When you tell them that they usually come up with something.

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Level 15
last updated ‎December 07, 2019 6:51 AM
I did submit family photos in an IRS audit on sale of home. They moved to a new tract of homes and the field mice ate most of their receipts. We have original purchase documents and photos of the backyard without the addition and with the addition. The old kitchen at Thanksgiving and the new kitchen years later. IRS did accept reasonable estimations of work done over the 30+ years the client lived there.
I had another audit with a plastic bag full of moldy receipts. I kept them in a banker box in preparation for the audit. Yellowjackets nested inside the box and added to the grossness of the documents. IRS settled for a reasonable estimation (Schedule C, cost of goods sold paid in cash at a vegetable stand).
No records does not mean NO records.

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Level 10
last updated ‎December 07, 2019 6:51 AM
Sure, George, but YOU can't make up the numbers.
** I'm still a champion... of the world! Even without The Lounge.
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