I always scan my leases and digitally guard them in a document server forever and forever. As a general rule, owners of rental properties should keep tax documents on their investment properties for at least seven years. The statute of limitations for filing an action on the basis of a breach of contract in Wisconsin is 6 years from the date of the infringement. The safest thing for a landlord is to keep the rental record of a former tenant, and in particular all contracts, at least 6 years from the date the contract ended. Imagine spending your life accumulating bank statements and bills on your desk. After only a decade, this stack would probably be of an incredible size. There are many kinds of documents, mostly financial – that you should keep for a certain period of time, but that you don`t need to store forever. You may need to reference them monthly or weekly for a while, so they will only drag another piece of paper around and cause the mess. Although the Internal Revenue Service recommends keeping tax documents for three years, you should keep the documents relating to leased property longer. In addition to tracking your income and rental expenses, you must also keep records that insure the deductions or credits you claim on your tax return. You also want to keep documents that can protect you from disputes between landlords and tenants.
Question: How long should we keep the old rental contracts in our apartment complex? I heard two years. It`s true? While the IRS can check a tax return for up to seven years after the file, you usually no longer have to worry about being reviewed after three years. But if the IRS thinks you are undervaluing your income, it has the right to extend the three-year period by an additional three years. Cancelling a rotten debt allows the IRS to go back seven years, which is the requirement to apply for a loan or to pay off non-performing debts. Even if the tax return review period has expired, you will receive indefinitely information about your assets that you may need in the future. In addition to the old leases, you should keep anything that documents the relationship between the landlord and the tenant or supports the items you declare on your tax return. If the IRS verifies your tax return and you cannot provide the correct confirmation documents, you may be liable for additional taxes and penalties. For example, the documents they must keep are rental providers, tenant information packages or other documents you gave to the tenant when moving in, rental application, credit reports, check-lists for entry and exit inspections, rent vouchers and repair bills. How long should I hold a lease after moving, receiving a deposit, etc.? Everything else, like paperwork, you can just recycle it. Make sure a flexible storage system is configured to keep these documents in check.
It`s also a good idea to get used to going through your documents stored on a regular basis. Try to do this if you pay bills, submit your taxes or take on a similar recurring task, so you don`t forget and your papers slip. Disputes with tenants or the IRS can arise long after a lease expires. Keep your leases for at least years in case of problems with your former tenants. Keep agreements longer in case of tax problems. The legal obligations related to the landlord-tenant relationship do not automatically stop when the tenancy agreement ends.