Please explain what the payment was for.

When selling our home the buyer asked that we pay off "City of buckeye assessment to Watson road". As a brand new community it was a fee that came with the house.

Further clarification... It's full name is Watson Road Community Facilities District and was a Leon on the lot for developing/expanding wastewater plant and collection trunk. Initial balance of $5900, payments to be made semianually totalling about $500 a year. It was not past due but remaining balance was paid off.

Add the payment to your basis in the property for determining your gain or loss on the sale.

I assume the assessment was due or past due.

In most cases assessments for local benefits are not tax deductible.  Please follow this link and review IRS Pub 530 for a discussion of deductible and non-deductible special assessments.  https://www.irs.gov/publications/p530/ar02.html#en_US_2016_publink100011838

If the assessment is not deductible as a form of property tax, the assessment you paid gets added to your basis in the property for purposes of calculating your gain/loss on the sale.