Almost no closing costs incurred on a sale of
a residence are deductible. An exception is any mortgage interest or real
estate taxes charged at closing to bring them up to the closing date. All other
closing costs (Title fees, real estate commissions, documentary stamps, credit
report costs, costs of an abstract, transfer taxes, home inspection, flood
certificate, attorney fees, etc. ), instead of being deductible, reduce the
sales price of the property (or increase the cost if you receive a Form
1099-S.)
On the sale of a personal residence,
reducing the sales price would reduce the gain. However, there may not be any
tax advantage in doing so, as in most instances the gain on the sale of a
residence is wholly or partly exempt from tax anyway.
For the sale of a residence, up to
$250,000 ($500,000 on a joint return where you both lived in the residence) of
gain can be excluded from income if you lived in and owned the house for two of
the last five years.
(You may have a smaller exclusion if
the property was used as a rental during the five year period, and you may have
income from recapture of depreciation if you claimed an office in the home
deduction for the home.)
If you work through the interview on
sale of a residence, TurboTax will compute the exclusion.
Look under the wages and income tab for
less common income, then sale of home.
