No, you should contact the city or county to see exactly what the funds were used for. The county library for example would not be part of your cost basis. Only those items that would affect your property value, as mentioned, sidewalks, sewer that directly relate to your property.
Don't forget to add the purchase expenses when you bought the home and any capital improvements you made after purchase. Add these to your cost basis. Also, if you qualify, you may be able to exclude gain.
- As long as you owned and lived in the home for two of the five years before the sale, up to $250,000 of profit is tax-free. And if you’re married and file a joint return, that amount doubles to $500,000. If your profit from the sale is more than that, the excess is reported as a capital gain. Just tell us about your home and the sale, and we’ll determine what, if any, of the profit is taxable and report it accordingly. See below for more details.
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