Taxpayer Saved 15 Hours of Paperwork, Lost $35,000 to the IRS
We are sure there are many parts of the tax code that you don’t like, particularly the parts where you have to keep tax records. In this episode we look at a tax court case NHuss Trust v Commr., TC Memo 2005-236. This case looks at a married couple that sold their home and claimed no taxable gain because of the $286,070 in improvements to the home. During its audit, the IRS found only $56,284 in improvements to the home since its purchase. The court upped that amount to $82,039, creating $101,907 in taxable capital gains.