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.

1934

1 Best answer

Expert Alumni

Mar 19, 2020 10:33:35 AM

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

Expert Alumni

Mar 19, 2020 10:33:35 AM

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

Level 2

Mar 19, 2020 11:01:48 AM

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!

Expert Alumni

Mar 20, 2020 8:33:18 AM

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