Real Estate Paperwork Retention (sales, housing, price, rental)

[wrench409]

I just sold my old home of 25 years for cash (sic).

I'm wondering what the paperwork retention period is for the old house? I've got everything from my original purchase till the sale last week.

Also, having lost my equity when the housing bubble burst, I had to sell it at a loss.

Does the money from the sale count towards my income next year? Can the loss (taxable value minus proceeds) be taken at tax time?

Thanks

[Mike1306]

Am I guessing that you took out an equity line or did a refi as the market was going up and is the reason for the lack of equity?
This would most probably have a bearing on what you could claim.
You best bet would be to talk to an accountant or tax professional but if you had no profit what are you going to have to claim?

[Jkgourmet]

You do need to talk to an accountant, but if this home were your residence and not a rental, generally speaking, the proceeds of the sale will not be included in your income next year.

Your gain or loss is calculated as follows:

Original purchase price + cost of any upgrades and renovations = Your total asset

Compare that number with the sales price, and you have your gain or loss on the sale of the asset.

If it's a gain, and you are single, you can claim up to $250,000 and pay no tax on the gain. $500,000 if you are married and filing a joint return.

If it's a loss, no, you cannot claim the loss. (I agree - that is not fair.)

As far as records retention for this transaction, the minimum is 6 years. As accountants, we often told people to keep the following records forever: Birth certificates, death certificates, divorce decrees, and real estate transaction paperwork.

This page has a nice general review of record retention policies.

[AngelBy]

Thanks J, I learned more from your reply

[accufitgolf]

We recently trashed all information about our house sale and then purchase of another in 2003.