How Long to Keep Your FIRPTA Records
Keeping the right FIRPTA documents for the right amount of time protects you if the IRS ever questions your return. Here is what to keep and for how long.
The General Rule: Three Years from Filing
The IRS has three years from the date you filed your tax return to audit it. Keep all documents related to your DVC sale and your FIRPTA return for at least three years after you file. That includes your Form 1040-NR, Schedule D, proof of your cost basis, and your stamped Form 8288-A.
The Six-Year Rule for Underreported Income
If the IRS believes you understated your income by more than 25% on a return, the audit window extends to six years. For DVC sales, this could theoretically apply if you significantly understated the sale price or gain. To be safe, keep records for six years after the filing date.
Original Purchase Documents: Keep Indefinitely
Your original DVC purchase documents — the closing statement showing what you paid — establish your cost basis. These should be kept as long as you own the contract, and for at least six years after you sell and file your return. Without them, you have no documented cost basis, which could result in the entire sale price being treated as gain.
What to Keep
- Original DVC purchase closing statement
- DVC purchase agreement (if purchased direct from Disney)
- Sale closing statement showing FIRPTA withholding
- Copy of Form 8288 (filed by closing agent)
- Stamped Form 8288-A from the IRS
- Your filed Form 1040-NR and all attachments
- Form W-7 and your ITIN assignment letter
- Proof of refund received (check image or bank record)
Digital Copies Are Fine
The IRS accepts digital records. Scan all original documents and store them in a secure cloud location. Physical documents can be lost or damaged. A digital backup ensures you have the records you need even years later.
