Don't Pay Uncle Sam More Than You Have To!

Record keeping seems to be mandatory in over lives today and, if you're like me, it may not be one of your favorite ways to spend your leisure time. So in an effort to help you, I thought I'd give you a list of potential improvements you could be making to your home that may increase your home's original cost basis.

This could ultimately reduce the eventual "profit" as calculated by the IRS.

The IRS does not publish a specific list of what they consider improvements; so when the actual time comes to file IRS file form 2110 (Sale or Exchange of Principal Residence), check with your tax advisor.

So when you're making decisions to improve your home, look at this partial list to alert yourself to keeping your receipts:

• Additions,
• Exterior Improvements,
• Interior Remodeling,
• Yard Improvements,
• Heating & Cooling Upgrades

Be aware that simply replacing a 40 gallon water heater with a new one is considered to be a "repair" that doesn't qualify for increasing your cost basis, but replacing it with a 55 gallon water heater is an improvement.

Keep a simple notebook with the dates of the improvements and the amount you paid with the receipts. That will guarantee you won't forget anything when it's time to sell in the future.

Wishing you the best,

Dan
Real Estate Consultant since 1985
dan@danweis.com
http://CincinnatiRealEstateHelp.com