Quote:
Originally Posted by Stupe the Second Sacker
What the? Wow...That's over sensitivity at it's worst.
How is it antagonistic to ask if hand written notes and an inbox with two decades worth of emails are acceptable forms of record keeping to the IRS? This is uncharted waters for many people and instead of helping, you guys respond like you're guarding a state secret.
Very odd.
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Contemporary documentation is usually fine, even if it’s self-produced, as long as it’s not ludicrous. It’s nice to have a receipt if you can get one, or some other verifiable documentation.
Here’s the thing - unless your basis is really high, it’s just not going to matter enough for the IRS to fight you on it. You say your basis is $20? There’s no juice to the squeeze for them to argue that it’s less. Even if they are right, they’re not going to pick up much more than $5 off you. Not unless you’re selling 50,000 items at $20 basis.
And if your cost basis is really high, then you hopefully have been keeping some documentation in hand.
There’s one more wrinkle here- what happens when you die? Your assets enter your estate, and your heirs step up the basis to market value at your death. This way, even if they don’t know what your basis was, they get a new basis when they inherit from you.
No state secrets here. But as with many things in tax law, it’s often not as black and white as we might hope.