Re: Buying and selling a rental property - which expense to add to cost base

Tax2019Pay — Wed, 15 Feb 2023 05:04:44 GMT

Hi David:

As a home buyer a few years ago, I received both seller credit and real estate broker credit. Do I need to deduct these from my home cost base?

Thanks

Re: Buying and selling a rental property - which expense to add to cost base

maglib — Thu, 16 Mar 2023 23:01:17 GMT

@Tax2019Pay yes you would.

Your adjusted basis is generally your cost in acquiring your home plus the cost of any capital improvements you made, less casualty loss amounts and other decreases. For more information on basis and adjusted basis, refer to Publication 523, Selling Your Home. If you financed the purchase of the house by obtaining a mortgage, include the mortgage proceeds in determining your adjusted cost basis in your home.

You may be able to exclude from income all or a portion of the gain on your home sale. If you can exclude all of the gain, you don't need to report the sale on your tax return, unless you received a Form 1099-S, Proceeds From Real Estate Transactions. To determine the amount of the gain you may exclude from income or for additional information on the tax rules that apply when you sell your home, refer to Publication 523. You must report on your return as taxable income any capital gain that you can't exclude.

topic Re: Buying and selling a rental property - which expense to add to cost base in Investors & landlords

Re: Buying and selling a rental property - which expense to add to cost base

Re: Buying and selling a rental property - which expense to add to cost base