Thank you both, and no, we don't have to bribe anyone in Europe to build a house, haha.
@Opus 17I have a few more questions.
1. So basically, if the land I received as a gift was $10,000 and my expenses to build the house up to day of sale were S140,000, my basis is $150,00, right?
2. Do I have to provide any date? I know for rental properties for example a date of purchase is required. In my case what would be that date? I'm sure when you sell a property a purchase date would be required. Is it the date when my parents gifted me the land or the date when I finished building the house before the sale?
It's a 20 year difference.
3. I have more than hundred receipts issued over 20 year period, do I have to convert every receipt to USD using exchange rate for each particular day they were issued?
4. Let's say I don't have an official receipt for putting a roof and I know that an average price in 2010 was let's say $20,000, is the IRS going to approve a hand written receipt with that price for that work? To make thing worse the person who did the work can't be reached or died? I know it's extreme, but I might be missing some receipts for major work and I'd like to prepare myself for any potential situation.
5. Last question: If I don't have any receipts to prove my cost basis, because the receipts were lost or burned, how do I even prove my basis. The house is there and was built, so the IRS can't question that fact. Should I use the FMV for a similar property in that area or hire a professional estimator to estimate the cost of building such property?
Thank you,
