Less tax will also be due if you add amounts to basis for fairy dust.  Imaginary numbers for imaginary improvements.  Some might call it cheating, but if IRS doesn't catch it, do you care? For that matter, if you don't subtract depreciation allowable from basis, what's to prevent you from later filing amended returns to get refunds?  It's not like IRS is going to match up other returns to see if the same property was later sold.  And yes, you could go back 20 years, if taxes are still owed for prior years.