HANG ONTO YOUR DOCS!

Did you know that closing documents are among the few sets of papers that should be kept for a lifetime? Though virtually everything in the file can be replaced by the title agency or other sources, you'll want to have all of it in one handy place so you don't have to go begging when you need it.

The settlement statement is especially helpful when prepping your income tax return. Sometimes called a HUD1, this standardized form is either two or three pages, depending on how it's printed. It reconciles the financial accounting of the sale, with credits and debits to the seller on one side and credits and debits to the buyer on the other. Purchase price, loan amount, tax adjustments, - that's all on page one. On page two are the closing costs.

You'll reference your settlement statement not only when prepping your tax return for the year in which you purchased the property but also potentially in the year in which you sell it, when the HUD1 from the sale of your home can be compared with the HUD1 from the purchase to determine what capital gains might be due - for instance, if the property was not your primary residence or if the sale falls outside the exclusion limits on the sale of a primary residence.