Capital Expenses estimate

Forum|Forum|1 year ago
March 20, 2025
3 replies
40 views

I owned my home for 40 years. Is there a rule of thumb as to the approximate amount of reasonable capital expenses over 40 years. I do not have all receipts, and will be using Kohan Rule that allows estimation).

Best answer by JohnB5677

No, there is no way to just include 40 years of capital expenditures.

They will have to be individually listed and estimated.
The task is uniquely yours.
If you made significant improvements to the home you will have to have:
- Date construction was completed
- Description of what was done
- Estimated cost of the project.

This does not have to be attached to the tax return.

However, you must be ready to provide it if the IRS asks for it.

JohnB5677

Level 15

Capital expenses are significant improvements (Not Repairs) to the home.

Renovating a kitchen, or adding a deck are examples.
You can estimate the cost and include it in the basis.
Consider the exemption below before you spend significant time on the estimates.

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.

Topic no. 701, Sale of your home

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eliezer18Author

Level 2

Thank you. Considering all that, is there some general guideline of reasonable expenses for 40 years? I am estimating, and do not want to overshoot. I am looking for a real dollar number, albeit very approximate. Appreciared.

JohnB5677Answer

Level 15

No, there is no way to just include 40 years of capital expenditures.

They will have to be individually listed and estimated.
The task is uniquely yours.
If you made significant improvements to the home you will have to have:
- Date construction was completed
- Description of what was done
- Estimated cost of the project.

This does not have to be attached to the tax return.

However, you must be ready to provide it if the IRS asks for it.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"