My husband and I built our home in 2008 and converted it to a rental in 2016. We sold it earlier this year. When we built it, we never in a million years dreamed that we would turn it into a rental and thus we didn't keep all our receipts. We have some, but quite a few are missing, including all the labour costs involved in the construction itself. So, we are missing some rather large amounts.
We are therefore not sure how to calculate cost basis. Does the IRS allow FMV to be used, and if so is it FMV at time of the build or time of conversion to a rental? My research leads me to believe that FMV is not allowable but I'm hoping I'm wrong because I'm not sure where to go with this otherwise. Thanks for any help!
