How Long to Keep Tax Records: A Checklist

Home Sale Records

HOME SALE RECORDS
DocumentHow Long to Keep It
Home sale closing documents, including closing statementAs long as you own the property + 3 years
Deed to the houseAs long as you own the property
Builder’s warranty or service contract for new home Until the warranty period ends
Community/condo association covenants, codes, restrictions (CC&Rs)As long as you own the property
Receipts for capital improvementsAs long as you own the property + 3 years
Mortgage payoff statements (certificate of satisfaction or lien release)Forever, just in case a lender says, “Hey, you still owe us money.”

Annual Tax Deductions

ANNUAL TAX DEDUCTIONS*
DocumentHow Long to Keep It
Property tax payment (tax bill + canceled check or bank statement showing check was cashed)3 years after the due date of the return showing the deduction
Year-end mortgage statements3 years after the due date of the return showing the deduction
Tax returns3 years from the date you file your return or 2 years from the date you paid the tax, whichever is later

Insurance and Warranties

INSURANCE AND WARRANTIES
DocumentHow Long to Keep It
Home repair receiptsUntil warranty expires
Inventory of household possessionsForever (Remember to make updates.)
Homeowners insurance policiesUntil you receive the next year’s policy
Service contracts and warrantiesAs long as you have the item being warrantied

Investment Real Estate Deductions

INVESTMENT (LANDLORD) REAL ESTATE DEDUCTIONS
DocumentHow Long to Keep It
Appraisal or valuation used to calculate depreciationAs long as you own the property + 3 years
Receipts for capital expenses, such as an addition or improvementsAs long as you own the property + 3 years
Receipts for repairs and other expenses3 years after the due date of the return showing the deduction
Landlord’s insurance payment receipt (canceled check or bank statement showing check was cashed)3 years after the due date showing the deduction
Landlord’s insurance policyUntil you receive the next year’s policy
Partnership or LLC agreements for real estate investmentsAs long as the partnership or LLC exists
Landlord insurance receipts (canceled check or bank statement showing check was cashed)3 years after you deduct the expense
Section 1031 (like-kind exchange) sale records for both your old and new properties, including HUD-1 settlement sheetAs long as you own the property + 3 years

Miscellaneous Records

MISCELLANEOUS RECORDS
DocumentHow Long to Keep It
Wills and property trustsUntil updated
Date-of-death home value record for inherited home, and any rules for heirs’ use of homeAs long as you or spouse owns the home + 3 years
Original owners’ purchase documents (sales contract, deed) for home given to you as a giftAs long as you or spouse owns the home + 3 years
Divorce decree with home sale clauseAs long as you or spouse owns the home + 3 years
Employment records for live-in help (W-2s, W-4s, pay and benefits statements)4 years after you make (or owe) payroll tax payments

*Info provided by Houselogic

Until next time….

How to Avoid a Gender Gap When Investing in the Housing Market

When buying a home, we all want to feel like we’re making the right decision, paying a fair price, and making the best investment of our lives. According to a recent gender-based study, men and women can unknowingly walk away with very different financial outcomes when the deal closes. Thankfully, if you follow some simple ways to arm yourself with the information you need to prepare in advance, you’re more likely to feel like you’ve won when the keys to your new house are in your pocket.

Kelly Shue and Paul Goldsmith-Pinkham of the Yale School of Management showed in their recent study The Gender Gap in Housing Returns, when single women invest in the housing market, they’re generally losing out compared to their male counterparts. The report explains,

“We find that single men earn one percentage point higher unlevered returns per year on housing investment relative to single women…The gender gap grows significantly larger after adjusting for mortgage borrowing: men earn 6 percentage points higher levered returns per year relative to women. Data on repeat sales reveal that women buy the same property for approximately 2% more and sell for 2% less.”

On National Public Radio (NPR), Kelly Shue elaborated by saying,

“Women are losing about $1,370 per year relative to men because they tend to buy the same house at a higher price and sell for a lower price.”

In the grand scheme of things, $1,370 a year could be as much as an entire month’s mortgage payment for many households in the United States.

How can you make sure this doesn’t happen to you?

The good news is, it doesn’t have to be this way for anyone, regardless of gender. Here are a few tips on how to make sure you’re prepped and ready to enter the housing market with your best foot forward.

1. Work with a Trusted Real Estate Professional

You need someone on your side who’s going to have your best interest in mind and support your unique homeownership goals. Hiring an agent who has a finger on the pulse of the market will make your buying experience an educated one. You need someone who’s going to tell you the truth, not just what they think you want to hear.

2. Understand the Homebuying Process

Know the key homebuying steps in advance, so you have the best context for how the process works from pre-approval to budgeting, inspections, and more. Have a price range in mind that you can realistically afford, too, so you’re ready to make an offer that positions you for success. Ask your agent questions along the way, and partner together so you feel confident and prepared at every turn.

3. Research the Current Market

Make sure you know the current trends and insights of the housing market as well. When you find a home that’s the perfect fit, determine what other homes are selling for in the neighborhood. These numbers can vary over time based on market conditions such as inventory, appreciation, and many other economic factors. A great agent will provide you with this information and guide you through every step from start to finish.

Bottom Line

When you have a trusted advisor on your side and you’re confident you know exactly what’s happening in the market, you’ll be in a great position to negotiate effectively. Reach out to a local real estate professional today to make sure you’re ready to win the homebuying deal.

Until next time….

*Info provided by Keeping Current Matters

The Link Between Clutter and Depression

It’s been proven. Clutter is a bummer — literally.

Dishes in the sink, toys throughout the house, stuff covering every flat surface; this clutter not only makes our homes look bad, it makes us feel bad, too.

At least that’s what researchers at UCLA’s Center on Everyday Lives and Families (CELF) discovered when they explored in real time the relationship between 32 California families and the objects in their homes. The resulting book, “Life at Home in The Twenty-First Century,” is a rare look at how middle-class Americans use the space in their homes and interact with the things they accumulate over a lifetime.

Our over-worked closets are overflowing with things we rarely touch.

It turns out that clutter has a profound affect on our mood and self-esteem. CELF’s anthropologists, social scientists, and archaeologists found:

  • A link between high cortisol (stress hormone) levels in female home owners and a high density of household objects. The more stuff, the more stress women feel. Men, on the other hand, don’t seem bothered by mess, which accounts for tensions between tidy wives and their clutter bug hubbies.
  • Women associate a tidy home with a happy and successful family. The more dishes that pile up in the sink, the more anxious women feel.
  • Even families that want to reduce clutter often are emotionally paralyzed when it comes to sorting and pitching objects. They either can’t break sentimental attachments to objects or believe their things have hidden monetary value.
  • Although U.S. consumers bear only 3% of the world’s children, we buy 40% of the world’s toys. And these toys live in every room, fighting for display space with kids’ trophies, artwork, and snapshots of their last soccer game.

Although “Life At Home documents the clutter problem, the book offers no solutions. But there are some simple things you can do to de-clutter your home and raise your spirits.

Adopt the Rule of Five

Every time you get up from your desk or walk through a room, put away five things. Or, each hour, devote five minutes to de-cluttering. At the end of the day, you’ve cleaned for an hour.

Be Ruthless About Your Kitchen Sink

Pledge to clear and clean your kitchen sink every day. It takes a couple of seconds more to place a dish in the dishwasher than dump it in the sink. A clean sink will instantly raise your spirits and decrease your anxiety.

Put Photos Away

Return to yesteryear when only photos of ancestors or weddings earned a place. Put snapshots in a family album, which will immediately de-clutter many flat surfaces.

Unburden Your Refrigerator Door

Researchers found a correlation between the number of items stuck to the fridge door and the amount of clutter throughout the house. Toss extra magnets, file restaurant menus, and place calendars in less conspicuous places.

Test Whether You’ll Miss It

Fill a box with items you don’t love or use. Seal the box and place it in a closet. If you haven’t opened the box in a year, donate it (unopened!) to charity.

Until next time….

*Info provided by Houselogic.com

Top Renovations for Maximum ROI

  • If you’re planning on selling your house in 2020, these are the top renovations that will give you the highest Return on your Investment.
  • Regardless of how long you’re planning on staying in your current home, it’s smart to be aware of which home renovations add the most value.
  • The exterior of a house is the first thing buyers see when searching for a home. Upgrading your roof or siding will ensure your home leaves a great first impression!

Until next time….

A Clutter-Clearing Plan for the New Year

A once a month guide to clearing the clutter from every room in your house.

Getting started: Turbocharge your decluttering. If you’re feeling inspired and motivated by the new year, take advantage of that energy and spend a few weekends clearing clutter throughout the house. Making noticeable headway will help motivate you to keep up the decluttering effort in the coming months. Try to get the other members of your household onboard — but if they are not interested, don’t try to force it. Hopefully they will see the positive changes happening around the house and change their tune!

Habit to cultivate: Keep an empty reusable bin in a closet, and use it to corral items you plan to give away.

January: Kitchen and pantry. Give yourself a fresh start for the new year with a clean kitchen, decluttered cabinets and a healthy pantry and fridge.

  • Toss worn dish towels or cut them up to make rags
  • Sell or give away specialty small appliances and tools you seldom or never use
  • Recycle or toss freebie cups and Tupperware containers without lids
  • Toss expired food and spices
  • Take stock of cookware and dishes; give away or sell pieces you do not need

Until next time….

*info provided by Houzz.com