topic We sold our primary home in 2020. We bought the home in 2003, refinanced 2016. what information do I use for Adjusted Cost Basis? Initial purchase of refinance? in Deductions & credits

We sold our primary home in 2020. We bought the home in 2003, refinanced 2016. what information do I use for Adjusted Cost Basis? Initial purchase of refinance?

pmeyerett — Tue, 23 Mar 2021 13:25:16 GMT

Do I use the Information from our Initial Purchase of the Refinance Information.?

Re: We sold our primary home in 2020. We bought the home in 2003, refinanced 2016. what information do I use for Adjusted Cost Basis? Initial purchase of refinance?

TomD8 — Tue, 23 Mar 2021 14:14:12 GMT

The adjusted cost basis of your home is the original price you paid for it, plus the cost of any capital improvements that you've made since purchase. Financing/refinancing is not part of the calculation.

A capital improvement is any work done that adds to the value of your home, increases its useful life, or adapts it to new uses. Common examples include room additions, new bathrooms, decks, fencing, landscaping, wiring upgrades, walkways, driveway, kitchen upgrades, plumbing upgrades, new roofs.

Re: We sold our primary home in 2020. We bought the home in 2003, refinanced 2016. what informati...

JohnW152 — Tue, 23 Mar 2021 14:15:45 GMT

TomD8’s answer is right on target. Refinancing isn't part of the calculation.

The adjusted basis of your home is the original purchase price, plus certain settlement fees paid at time of purchase, and the cost of any improvements made to the home prior your sale.

For a detailed explanation of items that can be added to your original basis to arrive at your adjusted basis, please see IRS Publication 523, Selling Your Home.