How Long to Keep Your FIRPTA Records

How long should you keep your DVC FIRPTA documents? The answer depends on what the document proves and what IRS audit risk exists. Get this wrong and you may not be able to defend your cost basis or prove your refund was legitimately claimed.

The General Rule: 7 Years from Filing Date

The IRS has up to 3 years from the filing date of your return to audit it under normal circumstances. The statute of limitations extends to 6 years if you underreported income by more than 25%. Keep all FIRPTA-related documents for at least 7 years from the date you filed your Form 1040-NR to cover either scenario with a margin.

If you omitted income from a return, the statute never closes. Keep documents indefinitely for any year in which income may have been omitted.

Documents to Keep Indefinitely: Cost Basis Records

Your cost basis documentation should be retained indefinitely (not just 7 years. Why? Because your basis is established at the time of original purchase, which may have been 10, 15, or 20 years before the sale. If you sell DVC in 2030 that you bought in 2008, you need the 2008 closing statement to prove basis. The standard retention period does not cover this gap.

Retain permanently:

• Original closing statement from DVC purchase) shows purchase price, all closing fees, transfer fees
• Closing statements from any points add-on purchases (each add-on adds to basis at its own purchase price
• Disney purchase agreement (for direct Disney sales)) shows contract price
• Deed or title documents (proves ownership and purchase date

Practical tip: scan these documents and store them in a cloud service (Google Drive, iCloud, Dropbox). Physical documents can be lost in a house move, fire, or flood) digital copies are retrievable anywhere.

Documents to Keep for 7 Years: Sale and Filing Records

• DVC resale closing statement (shows gross sale price, commission, and net proceeds
• Form 8288-A) your withholding receipt showing what was sent to the IRS
• A copy of your filed Form 1040-NR, Schedule D, and Form 8949 (proof of what you reported and claimed
• Mailing tracking confirmation) proves your return was delivered to the IRS
• Any IRS correspondence (notices, letters, audit requests related to the return
• Form 8288-B (if filed)) the withholding certificate application and any IRS response
• Form W-7 and ITIN assignment letter (proof of your taxpayer identification

When Records Help Most

FIRPTA cost basis records become critically important if:

• The IRS questions your reported gain or loss on the return
• You are audited (rare, but possible for non-resident returns with large refunds)
• You sell the same DVC contract again (unlikely, but split contracts and resales happen)
• Your home-country tax authority requests proof of US tax paid for the double taxation relief claim

Digital Storage Recommendations

• Scan all paper documents at 300 DPI or higher) PDF format is easiest to share with tax professionals
• Organise by year and document type (e.g., "2025_DVC_Sale_Closing_Statement.pdf")
• Store in at least two places: one local (hard drive) and one cloud-based
• For cost basis documents that need to be kept indefinitely, keep a second cloud backup with a different provider

Frequently Asked Questions

How long should I keep FIRPTA documents?
Cost basis documents (original purchase records) should be kept indefinitely (they may be needed decades after the purchase to prove basis at time of sale. All other FIRPTA records (sale closing statement, Form 8288-A, copy of 1040-NR) should be kept for at least 7 years from the filing date of your return.

What is the most important FIRPTA document to retain?
Your original DVC closing statement from the purchase) it proves your cost basis. Without it, you cannot document your adjusted cost basis if the IRS questions your reported gain.

Can I keep FIRPTA records digitally?
Yes. The IRS accepts digital records as long as they are a complete and legible reproduction of the original. Scan paper documents at high resolution and store them in at least two locations (local + cloud backup).