You said 'We do warn them, that if audited, they could have issues if adequate support is lacking. '
If it gets audited and we could not provide adequate support to amount of cost basis I have given to donee - what are the consequences or penalties ?
It is highly likely that I will not be able to provide adequate support because I dont have documentations of improvements as many of them I have done myself and even material is bought on craigslist etc. without receipt.
So lets say I given 200k which is tax assessed value for this year but IRS audits and say nope because u dont have supporting docs we will go back to when you purchased and it was only 75k so...they will ask to use 75k or they will ask for penalties and punishment ? if penalty .what is the penalty? remember not providing supporting docs is one thing and doing intentional is another thing(i.e. crime)
