Once You Have Filed Your Return, Keep Your Records

We recommend that you keep all your cancelled checks for 7 years. It would be wise to keep your income tax returns permanently. You should keep documents showing your basis in a piece of property for as long as you own that piece of property. If you sell a piece of property, you should keep your records showing your basis in the old property for at least 6 years after the sale.

If you do not keep the requisite records, it may be impossible for you to prove that you incurred deductible expenses or to establish your basis for gain or loss. Without such proof, the IRS can deny you a deduction. If you acquire a property from estate or by gift, it is advisable to secure a copy of the valuation of the estate or of the gift tax return so that you can determine the donor's basis in the property that you have been given. Knowing the donor's basis, you can easily determine your gain or loss when you sell the property.