Yes, closing costs paid on your own behalf or for the buyer are costs of the sale.  

However, these costs will increase your cost basis.  Increasing your cost basis reduces the amount you pay taxes on.

But I'm still not clear on where you actually roll the Seller credit into the equation as it's not included in the J. Total Closing Costs of the closing disclosure. Just add it to the allowable closing costs as a sales expense? 

(Working from a Substitute From 1099 Seller)

Thanks,

Joe

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 ?

Should I just decrease the Original sale of property amount by the credit to the seller or what QB account would I use to capture this transaction?

Any credit given to the buyer at closing, that was not included on the closing statement, would be reported as a sales expense in Quickbooks.     

@Dane F

Dear Experts:

On HUD-1, for a home buyer, does line 215 Seller credit and line 216 Real estate broker credit that the buyer received when purchasing the home reduce the cost base of the home? 

Yes, both credits will reduce the initial cost basis of the house you are buying.