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eliezer18
Returning Member

Capital Expenses estimate

I owned my home for 40 years. Is there a rule of thumb as to the approximate amount of reasonable capital expenses over 40 years. I do not have all receipts, and will be using Kohan Rule that allows estimation). 

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1 Best answer

Accepted Solutions
JohnB5677
Expert Alumni

Capital Expenses estimate

No, there is no way to just include 40 years of capital expenditures.  

 

  • They will have to be individually listed and estimated.
  • The task is uniquely yours.
  • If you made significant improvements to the home you will have to have:
    • Date construction was completed
    • Description of what was done
    • Estimated cost of the project.

This does not have to be attached to the tax return.

However, you must be ready to provide it if the IRS asks for it.

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3 Replies
JohnB5677
Expert Alumni

Capital Expenses estimate

Capital expenses are significant improvements (Not Repairs) to the home.

 

  • Renovating a kitchen, or adding a deck are examples.
  • You can estimate the cost and include it in the basis.
  • Consider the exemption below before you spend significant time on the estimates.

If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse.

 

Topic no. 701, Sale of your home

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eliezer18
Returning Member

Capital Expenses estimate

Thank you. Considering all that, is there some general guideline of reasonable expenses for 40 years? I am estimating, and do not want to overshoot. I am looking for a real dollar number, albeit very approximate. Appreciared.

JohnB5677
Expert Alumni

Capital Expenses estimate

No, there is no way to just include 40 years of capital expenditures.  

 

  • They will have to be individually listed and estimated.
  • The task is uniquely yours.
  • If you made significant improvements to the home you will have to have:
    • Date construction was completed
    • Description of what was done
    • Estimated cost of the project.

This does not have to be attached to the tax return.

However, you must be ready to provide it if the IRS asks for it.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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