3. Acquisition costs for property
It is essential to keep any records that are related to your property. This means you should keep records not only for your home but also for artwork, stocks, vacation homes, or rental property.
The most important things that you need to have are documents that can show how much you paid for that property, which includes commissions and other acquisition costs. This information is key to knowing when you decide to sell the property. In this way, you will know all the gains for sure when you decide to sell. If you don’t know these things for sure, there is a chance that you might have to pay more taxes than would otherwise be due.
Remember that if the IRS ever challenges your return, you need to have all the necessary documents to prove your tax basis.
