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We keep a “house” file separate from our yearly tax files. by Peekay

Any work done on the house goes there. 1) if something needs to be referenced it is in a single spot, 2) when the house is sold beginning purchase price+any permanent expenditures = increased basis. If the sales price -purchase price ends up being near the tax-free profit limit, proof of permanent expenditures are worth their weight in gold. Even better if it is a corporate relo. We recovered a decent chunk of change during a relo as the company reimbursed a certain amount of loss, and all our receipts pushed the basis up past the selling price.