We bought a house in 1978 and lived in it until 2012. We turned it into a rental at that time and rented it until 2021 and sold it. In 2015 it was turned into a business rental since it had been rented for more than 3 years. What figure do I put in for the purchase cost of the house? What we paid in 1978 or what its value was in 2015 when it was converted into a business property?
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Let's calculate basis:
For complete details on selling a rental, see Publication 527 (2020), Residential Rental Property - IRS.
Records can be tough and if you are audited, you will need to be able to prove things. Pictures are great. If you have some from when you purchased the home and pictures of parties and things through the years showing changes are great evidence!
Let's calculate basis:
For complete details on selling a rental, see Publication 527 (2020), Residential Rental Property - IRS.
Records can be tough and if you are audited, you will need to be able to prove things. Pictures are great. If you have some from when you purchased the home and pictures of parties and things through the years showing changes are great evidence!
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