How Long to Retain Records

Craig's Memo
Spring 2004

We sent this list to you last year, but thought a reminder would be a good idea.

How Long Should You Retain Personal Records?

Whenever the Internal Revenue Service questions an item on a tax return, the burden of proof is always on the taxpayer. In fact, if a deduction cannot be substantiated with the necessary records, the Internal Revenue Service will often disallow it. The following outlines the retention periods for financial records:

Types of Financial Records	Length of Time To Be Retained
1099 forms and other documents supporting your tax return	At least "three years".
Individual income tax returns, W-2's payroll, unemployment returns	All of these records should be kept permanently.
Banks checks and bank statements	You are required to keep these records for at least seven years. Since you may need them to settle non-tax mattters, it may be prudent to keep them for a longer period.
Security transactions (stocks, bonds, mutual funds, etc.)	You should keep these records for as long as you hold the security. The records show purchase date and price, number of shares purchased, sales date and price. For tax purposes, you should retain them for at least "three years" after selling the security.
Real Estate Records	These records should be kept "indefinitely". Records showing capital improvement should be maintained to document adjustments to basis. Also, if you sell your old home and purchase a new one to defer the tax on the gain, your should keep all the records for both homes.
Insurance records	You should photograph all valuables and major household items for insurance purposes. These, along with any appraisals of furs, jewelry, art work, etc. should be kept in a safe deposit box.
Warranties, guarantees and receipts for major purchases	Keep these records for as long as you own the item.

Thanks for your business,
Sycamore Financial Group

Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

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