EFTA01971271.pdf

To: Jeffrey Epsteinueevacationagmail.comj From: Richard Kahn Sent Mon 6/3/2013 7:10:33 PM Subject Landscaping & Basis Based on reading on IRS website i believe landscaping is an improvement to basis. I also asked Alan D the question and am awaiting his feedback http://www.irs.goviputilications/p5231ar02.html Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. To figure your adjusted basis, you can use Worksheet 1, found toward the end of this publication. Filled-in examples of that worksheet arc included in Comprehensive Eramples , later. Recordkeeping. You should keep records to prove your home's adjusted basis. Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. Keep records proving the basis of both homes as long as they are needed for tax purposes. The records you should keep include: • Proof of the home's purchase price and purchase expenses; • Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis; • Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain; • Any Form 982 you filed to exclude any discharge of qualified principal residence indebtedness; • Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997; and • Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. Increases to Basis EFTA_R1_004 53890 EFTA01971271 These include the following. • Additions and other improvements that have a useful life of more than 1 year. • Special assessments for local improvements. • Amounts you spent after a casualty to restore damaged property. Improvements. These add to the value of your home, prolong its useful life, or adapt it to new uses. You add the cost of additions and other improvements to the basis of your property. The following chart lists some other examples of improvements. Examples of Improvements That Increase Basis Additions Heating & Air Conditioning Bedroom Heating system Bathroom Central air conditioning Deck Furnace Garage Duct work Porch Central humidifier Patio Filtration system Plumbing Lawn & Grounds Septic system Landscaping Water heater Driveway Soft water system Walkway Filtration system Fence Retaining wall Interior Sprinkler system Improvements Swimming pool Built-in appliances Kitchen modernization Miscellaneous Flooring Storm windows, doors Wall-to-wall carpeting New roof Central vacuum Insulation Wiring upgrades Attic Satellite dish Walls Security system Floors Pipes and duct work Richard Kahn HBRK Associates Inc. 575 Lexington Avenue, 4th Floor, New York New York 10022 tel EFTA_R1_00453891 EFTA01971272  f ell ce EFTA_R1_004 53892 EFTA01971273