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Ask Lane Your Own Question
Category: Finance
Satisfied Customers: 11821
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I have a real estate cost basis question, approximately

Customer Question

i have a real estate cost basis question
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: approximately 10-11 years ago I bought into a partnership for a piece of land. That same land got sold in 2016 and i had proceeds coming to me.
JA: Is there anything else the Accountant should be aware of?
Customer: I invested 50K over the course of 5 payment. Therefore the 50K is my cost basis, but i don't know how to prove that since i don't have the cancelled checks
Submitted: 2 months ago.
Category: Finance
Customer: replied 2 months ago.
To close out the question - if I note in my 2016 taxes that i had a $50K cost basis to partially offset the proceeds I received from the sale of the land late last year, if the IRS decides to audit me, what would I be able to tell / show the IRS to validate my cost basis. Keep in mind that the transaction goes back over 10 years ago and I've read that banks can only go back 7 years to provide me with cancelled checks. In short could i be 'in trouble" with IRS if I can't prove my cost basis?
Expert:  Lane replied 2 months ago.

Hi. My name's Lane.


The good news, is that it's VERY rare that IRS audits when you report your cost basis.


But in the event OF an audit, given the age of this, they would very very amenable to your simply showing (1) that you're on the deed as an owner and (2) documenting the fair market value of like kind property at the time.


Realtors and appraisers can help with this. You can also go to the courthouse deed room (most of which has been put online these days) and look for like kind sales of property around that time.


But again, if the number is ***** that is not, in of itself, an audit flag.

Expert:  Lane replied 2 months ago.

Every city has a place where the public can go to search for information on property.

Property records are maintained at either the county courthouse, county recorder, city hall or another city or county department. Many public offices are staffed by knowledgeable personnel ready to help you find property deeds.

This might be a good place to start:


Please let me know if you have ANY questions at all, before rating me.

I hope you’ll rate me (using those stars, or faces on your screen, by clicking submit) based on thoroughness and accuracy, rather than any good news / bad news content.

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Thank you!


I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents since 1986.