Hello Vanessa,
Thank you very much for the detailed reply.
I understand your answer but it is strange (at least to me) that IRS won't know how much I paid for the home and how much are the Capital Improvements. Because I would simply (if I understand your suggestion correctly) enter the date when the home was purchased and the Adjusted (cost basis) amount.
I suppose someone from IRS will check the number and decide (if necessary in their view) to audit us.
Again, thank you.
