Tax question regarding rehab costs

[Alex K.]

I have an unusual situation:

I own a property which is under contract to sell to my tenants on Nov 1. This happened because they wanted to buy it immediately after I bought it but there is a 3 month deed restriction from FNMA.

The tenants are fixing the place up. The rental agreement states that I am to receive copies of receipts for all work done to the property. My plan was to use these receipts to increase my basis value of the property. Since the repairs are being done while I still own the property, I should be able to do this, right? Does it matter that I am not the payee on the receipt? For example the plumbing bill is $3400 (install RV water/sewer/electrical hookups) and it shows the date and the property address, but my tenant's name on it. Will the IRS frown upon this?

I don't see how the tenants could use the receipt to increase their basis value since they did not own the property when the work was done.