@joe1937 wrote:
Do you have to have backup for all the improvements you made over the 20 years?
“Deductions are a matter of legislative grace;
taxpayers bear the burden of substantiating their
claimed deductions by keeping and producing
records sufficient to enable the Commissioner to
determine the correct tax liability.” INDOPCO,
Inc. v. Comm’r, 503 U.S. 79, 84 (1992)
If audited, the IRS only has to award adjustments you can prove with sufficient records. The IRS still has to be reasonable; if you can prove there was no road in 2000 and there was a road in 2023, they can't just assume elves built it in the middle of the night for free. They would generally have to allow something, but it might not be as much as you actually paid.
