The OP did not buy a property with one home. He bought an empty lot and built a home on it in 2002. He lived in the home for some years, then moved to a new primary home that he built in 2013. He did not sell the 2002 home. He says it is now a vacation home and he is thinking of selling it now. He has not said whether he ever rented it out. He is only selling one home: the one that he built in 2002, lived in, then moved out of.
He did not subdivide the lot. The two homes are on entirely separate lots.
@Rodthabod If you never rented out the home that you built in 2002, and you consider it a vacation home, then it's a second home, not an investment property.
The primary problem seems to be that @Rodthabod has no records of how much he spent to build the 2002 home, so he has no way to prove his basis. He's not even sure what his basis is, because he has no records. He can only make a ballpark guess.
I see a couple of possible secondary problems.
- It's not clear whether the entire amount of the mortgage was used to build the home. If not, there could be issues with mortgage interest deductions taken in previous years.
- If it was ever a rental, it's not clear whether proper depreciation was claimed.
100% Spot on!
