Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
bedner824
New Member

Calculating cost basis for a house that was sold in 2016.

The house that was sold is 50+ years old.  Over the years there were many improvements to the home.  ie:  adding a second level, garage, sun room.  How do I calculate the cost basis when the improvements were done 40 years ago?  The person who did the construction is deceased.  ??
1 Best answer

Accepted Solutions
KenH1
New Member

Calculating cost basis for a house that was sold in 2016.

You should make conservative estimates of the improvements and add it to the cost basis.  The IRS is unlikely to complain, given the time period involved, as long as they are reasonable.

Of course, if the gain, without the adjustment to cost basis, will be less than $250,000 ($500,000 if filing jointly), then there is no need to estimate at all because the entire gain will be excludable.  It won't matter if the gain is $1 or $249,999.

View solution in original post

1 Reply
KenH1
New Member

Calculating cost basis for a house that was sold in 2016.

You should make conservative estimates of the improvements and add it to the cost basis.  The IRS is unlikely to complain, given the time period involved, as long as they are reasonable.

Of course, if the gain, without the adjustment to cost basis, will be less than $250,000 ($500,000 if filing jointly), then there is no need to estimate at all because the entire gain will be excludable.  It won't matter if the gain is $1 or $249,999.

Dynamic AdsDynamic Ads
Privacy Settings
v