Been IRS audited upon sale of rental property??

[Diane G.]

Have anyone been picked for IRS audit upon sale of a rental property?

How many years does IRS go back in terms of checking the reported expenses and income, and the accumulated gain/loss over the years?   If you read the IRS website, it requires keeping records for as long as one holds the rental property.... But do they really go back 30 years if the property has been held for 30 years?  Thank you

[Steven Hamilton II]

Originally posted by @Diane G.:

Have anyone been picked for IRS audit upon sale of a rental property?

How many years does IRS go back in terms of checking the reported expenses and income, and the accumulated gain/loss over the years?   If you read the IRS website, it requires keeping records for as long as one holds the rental property.... But do they really go back 30 years if the property has been held for 30 years?  Thank you

I represent clients before the IRS Typically they will audit 2-3 years unless there is suspected fraud. They may ask you to prove the basis at the time of sale which is perfectly reasonable. My advice is to keep the returns as long as your oldest property so you have some record to go back to. In this day and age with technology there is not reason you should not be able to keep a digital copy of those old records and include them with the new ones. I have an audit right now in West Palm Beach where their depreciation is being questioned on the tax return and it includes items from 7 years ago. So I have to show those records of where each item came from.