Mariola, The situation is pretty much the same as if the property was in the US. (read IRS publication 527). You should keep hold of all receipts, invoices, contracts, etc regarding expenses and income for the property. You will report all income on schedule 1040E, and will only be asked to produce that documentation if audited by the IRS.
Of course you will need to do the same thing when declaring the income for the Polish tax authorities (except on a monthly basis). If you are using a Polish accountant to do this, then they will insist on keeping the originals of all of theses documents. That is fine, make copies for yourself, and if you are audited get the originals from your accountant.
All the same rules apply in terms of expenses / repairs / improvements / deduction of mortgage interest. However, you must depreciate by the ADS method (40 years) not GDS. Everything must be converted to USD in the year of the transaction. (If you have taken out a non-USD mortgage you need to be aware of a few more things)
Sale of the property – You should have already established a depreciable basis for the property when reporting your rental income. You should have the original notarised Polish Contract for the purchase to back this up (as well as proof of any costs incurred during the purchase, and cost of improvements). When you sell the property you will have a copy of the final contract which shows the sale price. That’s all you need. (Unless you took out a non-USD mortgage)
I’ve had no luck finding a Polish accountant who can appreciate what is required of US tax payers. I am using an accountant in Krakow for my Polish taxes, and keep a copy of everything for myself to do my US taxes. I’m quite happy with the job they’ve been doing and if I ever need a copy of anything they are quick to post it over.
Oh yeah, I'm not an accountant or tax advisor. Otherwise I would be asking you for your first-born for the above information. Don’t take my word. Read the IRS publications, and call the IRS help lines if in doubt.