As a rule, keep any document that establishes what you paid for an investment for as long as you own it, then hang on to it for at least three more years after filing the tax return that reports the sale. That three-year minimum is how long the IRS generally has to audit a return, and it is the shortest answer to how long to keep investment records. Several common situations push the window to six or seven years, and a fraudulent or unfiled return has no time limit at all. What you actually need to keep, and for how long, depends on the type of asset, how you acquired it, and what could go wrong on a future return.
The Statute of Limitations Sets the Floor
Every retention timeline traces back to how long the IRS can assess additional tax against you. Those periods only start running after you file the return that reports the investment activity, which for cost basis records means the clock does not begin until you sell the asset.
- Three years. The general rule. The IRS has three years from the date you file to assess additional tax.1Office of the Law Revision Counsel. 26 US Code 6501 – Limitations on Assessment and Collection
- Six years. If you omit more than 25 percent of your gross income, the IRS gets six years.1Office of the Law Revision Counsel. 26 US Code 6501 – Limitations on Assessment and Collection
- Seven years. If you claim a loss for a worthless security or bad debt, you have seven years from the original return’s due date to file a refund claim, and the IRS has a matching window to review it.2Office of the Law Revision Counsel. 26 US Code 6511 – Limitations on Credit or Refund
- No limit. If you file a fraudulent return or never file at all, the statute never starts running.1Office of the Law Revision Counsel. 26 US Code 6501 – Limitations on Assessment and Collection
Because the clock starts at the sale, buy-and-hold investors need long memories. Someone who buys stock in 2026 and sells it in 2046 needs the purchase records for at least 23 years: 20 years of ownership plus the three-year floor afterward. That is the reasoning behind the standard shorthand of “keep it as long as you own it, then a few years more.”
Brokerage Accounts: Stocks, Bonds, and Mutual Funds
For a taxable brokerage account, the core records are trade confirmations showing purchase dates and prices, year-end account statements, and the annual tax forms your broker sends. Form 1099-B reports proceeds from sales, and Form 1099-DIV reports dividends.3Internal Revenue Service. About Form 1099-B, Proceeds From Broker and Barter Exchange Transactions4Internal Revenue Service. About Form 1099-DIV, Dividends and Distributions Keep these for at least three years after filing the return they relate to, and six years if there is any chance a large income omission could be at issue.
Cost basis is where most people get caught out. If the IRS questions your reported gain and you cannot prove what you paid, the worst case is that basis is treated as zero and the full sale price becomes taxable gain. That risk alone is reason to save every trade confirmation and reinvested-dividend record for the entire life of the investment.
Covered vs. Noncovered Shares
Starting in 2011 for individual stocks and 2012 for mutual fund shares, brokers became required to track and report cost basis to both you and the IRS on Form 1099-B. Those are “covered” shares, and your broker handles the math. Shares purchased before those dates are “noncovered,” and the broker has no obligation to report basis. If you still hold noncovered shares, the burden of proving what you paid falls entirely on you, and the original purchase records are irreplaceable.
Wash Sale Tracking
If you sell a security at a loss and buy the same or a substantially identical security within 30 days before or after the sale, the loss is disallowed as a wash sale. The disallowed loss is added to the basis of the replacement shares, which changes the tax on a later sale. Brokers only track wash sales within a single account using the same security identifier. Sell at a loss in one account and repurchase in another, or repurchase inside an IRA, and no one is flagging it for you. Track those cross-account transactions yourself and keep the documentation for as long as you hold the replacement shares, plus the normal retention period after you sell them.
Retirement Account Records
IRAs and 401(k) plans can span decades, and the records you need depend on whether any contributions were after-tax.
If everything you put in was pre-tax (traditional 401(k) deferrals, deductible IRA contributions), the record-keeping burden is lighter. Every dollar coming out will be taxed as ordinary income anyway. Save annual statements and distribution forms (Form 1099-R), but basis is not an issue.
The picture changes if you made nondeductible contributions to a traditional IRA. Those contributions have already been taxed, and Form 8606 is how you prove to the IRS that part of your withdrawals should not be taxed again.5Internal Revenue Service. About Form 8606, Nondeductible IRAs File Form 8606 for every year you make a nondeductible contribution, and keep every filed copy until the account is fully drained and the statute of limitations has run on the final return. Missing a required Form 8606 carries a $50 penalty per form.6Internal Revenue Service. 2025 Instructions for Form 8606 More consequentially, if you cannot prove after-tax basis when distributions start, the IRS may treat the whole withdrawal as taxable.
Roth conversions work the same way. Records showing the tax you paid at conversion need to survive for the life of the Roth account plus the post-distribution limitation period. Money frequently moves between account types over the years, and without the paper trail showing tax treatment at each step, you risk paying tax on the same dollars twice.
Form 5498, which your IRA custodian files annually, reports contributions and the year-end fair market value. It is worth saving alongside your Form 8606 copies as a backup on what went into the account each year.
Real Estate Investment Records
Investment property produces one of the longest retention obligations because your basis changes throughout ownership. The closing statement from the original purchase sets the starting basis. Every capital improvement increases basis and reduces taxable gain at sale. The line between improvements and repairs matters: a new roof adds to basis, while patching a leak is typically a current-year deduction.
Depreciation is the other moving piece. Rental owners claim depreciation each year, and those deductions reduce basis whether or not you actually took them. The IRS will recapture the depreciation you were entitled to claim even if you skipped it, so annual depreciation schedules and the returns claiming those deductions are critical records.
Keep every purchase document, improvement receipt, depreciation schedule, and property tax record for the entire holding period, then at least six years after filing the return reporting the sale. Six years matters here because a large understatement of gain on a property sale can easily clear the 25 percent threshold that triggers the extended limitation window.1Office of the Law Revision Counsel. 26 US Code 6501 – Limitations on Assessment and Collection If the IRS disallows years of depreciation deductions or improvement claims because you cannot produce receipts, expect back taxes, interest, and potentially a 20 percent accuracy-related penalty for negligence.7Office of the Law Revision Counsel. 26 US Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments
1031 Like-Kind Exchanges
If you defer gain by swapping one investment property for another in a 1031 exchange, basis from the old property carries over to the new one. You report the exchange on Form 8824.8Internal Revenue Service. Like-Kind Exchanges – Real Estate Tax Tips Documentation from every property in the chain has to survive until you finally sell a replacement in a taxable transaction and the limitation period on that return expires. Investors who chain multiple exchanges over decades can end up needing records from the first property in the sequence to substantiate basis on the last. Losing a middle link can leave the entire deferred gain taxable at a basis you cannot prove.
Cryptocurrency and Digital Assets
Digital assets follow the same basic tax rules as other property, but the recordkeeping is more demanding because transactions cross wallets, exchanges, and decentralized platforms that may not still be around when you need the history.
The IRS requires records for every purchase, sale, exchange, and disposition of digital assets, along with the fair market value in U.S. dollars at the time of each transaction.9Internal Revenue Service. Digital Assets To compute gain or loss you need the type of asset, the date and time, the number of units, and your basis.10Internal Revenue Service. Frequently Asked Questions on Digital Asset Transactions Gas fees and transaction costs factor into basis too.
Beginning in 2026, centralized brokers are required to report cost basis on certain digital asset transactions, and a new Form 1099-DA is rolling out for broker reporting of proceeds.11Internal Revenue Service. Treasury, IRS Issue Proposed Regulations to Make It Easier for Digital Asset Brokers to Provide 1099-DA Statements Electronically Broker reporting will not cover everything. Decentralized exchange trades, peer-to-peer transfers, staking rewards, airdrops, and activity from before 2026 all remain your job to document. Export your full transaction history from every exchange and wallet you use, save it in a durable format, and keep it for the entire holding period plus the applicable limitation window after disposal.
Inherited and Gifted Investments
Investments you receive by inheritance or gift come with special basis rules and specific documentation needs.
Inherited Investments
Property inherited from a deceased person generally takes a basis equal to fair market value on the date of death.12Office of the Law Revision Counsel. 26 US Code 1014 – Basis of Property Acquired From a Decedent The step-up wipes out gain that built up during the original owner’s lifetime. To lock in that benefit, keep documentation of the fair market value on the date of death, whether a brokerage statement, a professional appraisal, or market closing prices from that date.13Internal Revenue Service. Gifts and Inheritances
If the executor elected the alternate valuation date (six months after death), basis is set at that later date, and you will need confirmation of which election was made on the estate tax return. Either way, keep the valuation documentation for as long as you hold the asset, plus the retention window after sale.
Gifted Investments
When you receive an investment as a gift, your basis is generally the donor’s original basis, meaning what they paid for it.14Office of the Law Revision Counsel. 26 US Code 1015 – Basis of Property Acquired by Gifts and Transfers in Trust So you need the donor’s purchase records, not just your own. If the donor’s basis was higher than fair market value on the gift date and you later sell at a loss, the loss basis is the lower fair market value on that date. Keep records of any gift tax the donor paid too, since paid gift tax can increase your basis in certain circumstances.
The practical trouble with gifted assets is that donors rarely hand over a tidy file of purchase records along with the transferred shares. Get the donor’s basis information in writing while the donor is alive and able to provide it. Reconstructing a decades-old purchase price after the donor has died is much harder.
Worthless Securities
A loss on a security that became completely worthless creates its own retention rule. The loss is treated as though the security was sold on the last day of the tax year it became worthless.15GovInfo. 26 US Code 165 – Losses Pinpointing that exact year is often hard, and the IRS may disagree with the year you chose. To file an amended return or refund claim moving the loss to the correct year, you have seven years from the due date of the return for the year the loss occurred, well beyond the usual three-year window.2Office of the Law Revision Counsel. 26 US Code 6511 – Limitations on Credit or Refund
To claim the deduction, you have to prove the security truly became worthless, not just that it dropped sharply. Save records showing bankruptcy, delisting, ceased operations, or another basis for concluding shareholders can recover nothing. Brokerage statements showing you held the security and your original purchase records establishing basis matter equally. Keep this documentation for at least seven years after filing the return that claims the loss.
Partnership and Pass-Through Investments
If you invest through a partnership, S corporation, or similar pass-through entity, you receive a Schedule K-1 each year reporting your share of income, deductions, and credits. K-1s also serve a purpose many investors overlook: they are essential for tracking your outside basis. That basis changes each year with contributions, distributions, income allocations, and losses, and each partner is responsible for maintaining their own record of adjusted basis in the partnership interest.16Internal Revenue Service. Instructions for Form 1065 (2025)
Outside basis determines whether you can deduct allocated losses in the current year and how much gain or loss you recognize when you sell your interest or receive a liquidating distribution. Keep every K-1 and every record of capital contributions or distributions for the entire holding period, plus the applicable limitation period after disposal or dissolution. Partnerships can last decades, and losing early K-1s makes reconstructing basis extremely difficult.
If Records Are Already Missing
Despite best intentions, records disappear. Hard drives fail, brokerages close, paper files get thrown out during a move. If you are missing cost basis documentation, you have some options, none as reliable as the originals.
Your current or former brokerage may still have historical records. Many firms retain transaction data well past what appears in the online portal. A call to client services asking for historical trade confirmations is a reasonable first step. If the firm was acquired, the successor often inherited the records.
For missing records on deductible expenses, there is a legal doctrine called the Cohan rule that allows courts to estimate an expense amount when a taxpayer can prove the expense occurred but cannot document the exact figure. The catch is real: you must first prove the expense actually happened, because courts will not just accept your guess. The Cohan rule also does not apply where specific recordkeeping requirements are set by statute, such as certain travel and entertainment expenses. Treat it as a fallback, not a plan.
For cost basis on publicly traded securities, historical price data is available from financial data providers and exchange records. You can reconstruct a reasonable basis using the purchase date, if known, and the closing price on that date, adjusted for stock splits and reinvested dividends. That approach is much stronger paired with corroborating evidence, such as a bank statement showing the withdrawal that funded the purchase.
Storing Records Digitally
The IRS accepts digital records, but the standard is higher than saving a PDF to your desktop. Electronic records must contain enough transaction-level detail that the IRS can trace from source documents through to the amounts on your return, and you have to maintain documentation of the controls used to prevent unauthorized changes.17Internal Revenue Service. Automated Records
In practice, scanned paper documents and downloaded PDFs from your brokerage are acceptable if they are legible, complete, and stored in a format you can still open years from now. A few principles worth following:
- Use durable formats. PDF is widely supported and unlikely to become unreadable. Proprietary formats from specific software may not open in 20 years.
- Back up in more than one place. Cloud storage protects against a house fire or drive failure. A local backup protects against losing access to the cloud account.
- Organize by asset. A folder for each investment property, each brokerage account, and each retirement account makes retrieval during an audit far less painful than one massive folder.
- Download annually. Do not assume your brokerage’s online portal will be available in 15 years. Export or save year-end statements and tax documents each year as they arrive.