How long do you need to keep income tax papers?

For most items of income and expense, three years is the normal rule.

However, for any item, such as depreciation on assets which can be claimed in excess of the normal three years, you will want to keep your papers for as long as you are claiming the asset.

Papers relating to your cost, or cost basis, in capital assets should be kept forever and handed down to whoever will inherit these assets from you.