Ignorant Question on Future Appraisal/Valuation of House

[Adam Creighton]

Hey Everyone,

I recently purchased my first house in the South Shore area and am going to be doing a lot of the work myself. My first project is a small bathroom remodel, followed by another smaller bathroom remodel, and eventually kitchen floors and cabinets, etc. My question is; should I save all receipts of purchases for the house (vanity, toilet, dishwasher, flooring , materials for adding value to the house, etc) or is that overkill? I know when I get the house re-appraised down the road they obviously aren't going to look through every cent I've put into the property; but wanted a way to stay organized so I can at least track what I've put into it.

What do they look for when appraising/valuing a house?

Thanks in advance!

[Greg Scott]

An appraiser won't want or need to see your receipts.

I assume you are talking about a personal residence.  In that case, the only reason you might want to track improvements is if you think the property will appreciate beyond the allowed IRS exclusion to avoid capital gains.  Currently that exclusion is $250K for a single person.   In other words, if the property appreciates by $250K and you sell, you owe no federal taxes.  However, let's say you put on a $50K addition and when you sold you had a gain of $300K.  If you have paperwork for the $50K expenses, you would owe nothing.  Otherwise you would pay long term capital gains on that $50K.

If this is a rent property, then yes, track all that.... for the IRS, not the appraiser.