Hal_Al
Level 15

Deductions & credits

Because that's the way the tax law is written. You may not claim a loss on the sale of your personal residence. Closing costs and fix-up repairs are only added to your cost basis.

The good news is that any profit on the sale of your residence is tax excludable, up to $250,000 ($500,000 married); if you owned and lived in the  home two out of the 5 years prior to the sale.