Level 10 pk
Level 10
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Deductions & credits

Credit given to the buyer at closing  should have been included in the HUD-1 , closing statement -- not on the 1099-S.  If however, this adjustment was kept out of the settlement statement ( HUD-1) , for whatever reason, then you enter this as cost of sales -- like commissions, transfer taxes,.... misc. expenses.   As mentioned by @KittyM , this would reduce your sales proceeds ( NOT your COST Basis ) and thus reduce your gain ( capital or ordinary ).  Does this help ?