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Documentation for renovating a home

Is an itemized invoice/order sufficient for documentation? Or do I also need to keep the form of payment.

e.g. I put in an order for a list of items at a store; then I pay for that order at a cash register. The register receipt just shows the total I paid -- with no itemization. Do I need to keep both piece of paper for documentation.

How about payments I made to Contractor by check? I don't get the cancelled check back. How do I document that payment?

What documentation do I need for ordering online and pay by CC? Will the online invoice/order that shows payment sufficient? When I print out the Order right after the transaction, it doesn't show date of shipment. Do I need to print the same Order again after the items are shipped? And sometimes it doesn't show the shipped date at all.

TIA

Reply to
Not A Clue
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Documentation for what purpose?

Reply to
dpb

On Tue, 7 Nov 2017 14:57:34 EST, dpb wrote in

Taxes?

Reply to
VinnyB

For adjustment/increase in cost basis.

Reply to
Not A Clue

documentation.

Yes. You need to keep an itemized list of what was ordered/purchased and proof that the items were purchased.

You can request a copy of the check from the bank or you can request that the contractor send you a receipt marked paid.

Ship date is irrelevant. You need to show what you ordered and that the order was paid for. Usually the online order confirmation indicates what CC was charged. (It doesn't matter that the full CC number is redacted.)

Ira Smilovitz, EA

Reply to
ira smilovitz

On 07-Nov-17 5:17 PM, Not A Clue wrote: ...

What I figured; just thought make sure on same page...

See background info

and IRS Pub 523. For establishing basis in residence it's not necessarily just what is purchased added up; it depends on whether is improvement or repair, and a bunch of other details outlined in 523.

As for records, you should keep proof of payment in some manner; since basis accrues for as long as one keeps the house (and if have postponed gains on a previous sale it also may include basis in that former property as well) it's probably best to actually get copies of checks or other confirmed payment records at the time and file them away "just in case" as it may be any number of years in the future before the need arises.

The actual record is only needed if there were to be an audit and then's when the pressure is on and trying to reconstruct from what could be 20 year or more is much more difficult obviously.

Reply to
dpb

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