By Georgina Patterson | Your Real Estate Connection The Complete Guide The Bottom Line Organized homeowners save tens of thousands in taxes. A homeowner who spent $200,000 on documented improvements can reduce taxable gain by $200,000 when selling. At a 20% federal capital gains rate, that documentation alone could save $40,000 or more in tax. Keep these records for the life of ownership — plus 7 years after sale. PURCHASE & OWNERSHIP Keep forever (or until 7 years after sale