financial records – how long?
Transcript, 2 minutes 38 seconds, for use during week of Jan.
Description: Penny, Susan, and Ira talk about recordkeeping
on tax returns, gifts, and your home.
Announcer: invest Wisely comes to you from Iowa State University
Extension through a grant from the Investor Protection Trust,
providing investor education on the web at: investorprotection.org.
Susan: Penny we’ve talked about the
importance of keeping good records, so that I can prove my basis
should I sell an asset. What about other records? For
example, how long should I keep a copy of my income tax returns?
Penny: Some people suggest you keep tax returns for three years,
but keeping them longer is not a bad idea. You should also
keep copies of all your 1099s, state tax refund documents, and
any other information you used to prepare your return.
Susan: What about gifts?
Penny: You can give a gift up to $12,000
per year to any number of individuals with no tax consequences.
If you give more than $12,000--or $24,000 to a married couple--you’ll
need to file a gift tax return. Those
returns should be kept forever.
Ira: I keep all the documents
that I get from my investment adviser and from my mutual fund
companies. Do I need to keep those documents forever as
well or is there a time when it’s safe to throw them?
When you get the statements, check to make sure they’re
can throw your monthly statements at the end of each year after
received your year-end statement.
Susan: What about records on
my house? What information
is important to keep?
Penny: Currently, you’re allowed to
exclude the first $500,000--or $250,000 for a single person--of
capital gain on the sale of your principal residence. This
is true regardless of your age or how many homes you’ve
sold in the past.
Ira: Would this apply even if I previously took
a ‘once in a lifetime’ tax
exclusion on another home sale?
Penny: Yes. However, it’s
good to remember that even though the provision to allow you
to exclude capital gains is in place now, tax laws can change. That’s
why it’s a good idea to keep good records on your home,
including the purchase price, money spent on improvements, and
any other factors that might affect its basis.
Ira: Thank you,
Penny. As always, you’ve been very
Penny: You’re welcome. And remember, for
more information visit the ISU Extension website at extension.iastate.edu
and look for ‘Invest