Writing off expenses in tax return

[Account Closed]

Hello,

I have a friend who bought his first duplex and did some bathroom reno. The reno job was done by my referral and the cost is very friendly - like under 5K in Boston. He claimed that he will file the renovation costs for a lot higher in tax return than what he paid for. The job did not produce any document/receipts for obvious reasons, and common sense would tell me this is not possible. With that being said, can he do that? Or is he really naive?

[Daniel Hyman]

The IRS position is that it is the taxpayer's responsibility to substantiate all deductions on the tax return. Here are a few tidbits. 

https://www.irs.gov/businesses/small-businesses-se...

https://www.irs.gov/businesses/small-businesses-self-employed/what-kind-of-records-should-i-keep