Are closing costs considered an expense when SELLING a home?

[Solar Eclipse]

For the purpose of reducing capital gains on sale of a second home, most closing costs are considered selling expenses that can be used to reduce the gain, correct?

Much of the information and publications online seem to addresses the topic of closing costs primarily from the purchase/buyer perspective rather than seller perspective.

I believe typical seller's closing costs can be treated as selling expenses and reduce a capital gain, for example.

- Commissions

- Typical filing fees

- Owner's Title Insurance

- Transfer / Doc stamps

The total would typically end up under Code 'E' adjustment on 8949, essentially reducing the gain.

SE

[ThomasM125 · Accepted solution]

Yes, you can deduct those costs from the sale proceeds to arrive at your capital gain for tax purposes.

[Solar Eclipse]

Thanks for the timely response.

Not sure if this follow-up question warrants a separate post, but the one item I simply cannot find any confirmation as to being an includable closing cost is an HOA Estoppel fee.  I've seen some opposing opinions online, even on this forum.  It seem logical to me that if the Estoppel is a requirement for closing then the fee should be includable.

Anyone?

SE

[PaulaM]

If the HOA Estoppel certificate fee was required for the sale to complete and you paid it, then you can add it to your selling expenses. 

[Solar Eclipse]

Thanks.  Below is an opinion from a member on the forum a few years ago....it appears to be a contradictory view.  I wonder if the reply confused an Estoppel fee as being similar to HOA fees.  They are not the same 'class' of fee.  In the context of HOA fees I agree with the statement below - but an Estoppel letter fee required for closing should be includable as a Seller expense IMO.

"Unfortunately, estoppel or HOA fees cannot be added to the basis of the property, nor are they deductible expenses on a personal property."

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/can-the-capital-contribution-to-...