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Level 1

Is a rental property seller credit considered a part of selling expenses when calculating gain or loss of a sale?

I sold my rental townhome in 2019 and gave the buyer a seller credit of 3% ($6,600), as listed on the closing statement.  The 1099S reported only the gross proceeds of the sale ($220,000).  Can I include this amount as a selling expense, to be added to my cost basis,  in calculating gain or loss? Thank you.

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Expert Alumni

Is a rental property seller credit considered a part of selling expenses when calculating gain or loss of a sale?

Yes, that is part of the cost of selling this property. 

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Expert Alumni

Is a rental property seller credit considered a part of selling expenses when calculating gain or loss of a sale?

Yes, that is part of the cost of selling this property. 

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Level 1

Is a rental property seller credit considered a part of selling expenses when calculating gain or loss of a sale?

Thank you for your quick reply, Julie, but can you point me to the IRS publication or regulation (or other authoritative source) where this is specifically documented (just in case I have to convince someone else)?  Thanks!

Employee Tax Expert

Is a rental property seller credit considered a part of selling expenses when calculating gain or loss of a sale?

While none of these is particularly authoritative, as a combination of sources, they support seller credits as basis adjustment.

 

Source 1

 

Source 2

 

Source 3

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