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doug1001
New Member

Do I get to claim contractor expenses in adjusted costs for sale of home?

Do I get to include payments made to contractor as part of my home sale adjusted cost. This would be labor, rough materials, etc. Thank you.
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PaulaM
Employee Tax Expert

Do I get to claim contractor expenses in adjusted costs for sale of home?

Yes, you would include the costs of improvements to your home's basis. But you may not need to enter the sale of your primary home at all. 

You may qualify to exclude from income all or part of any gain from the sale of your primary residence if you meet ownership and use tests. This means for the 5-year period ending with the sale of the home, you lived in it as your main home and you owned it for 2 years.

If you meet both tests, you may exclude up to $250,000 ($500,000 on joint returns) of gain from your income, and you would not report it on your return.

Do not report the sale of your main home on your tax return unless:

  • You have a gain and do not qualify to exclude all of it,
  • You have a gain and choose not to exclude it, or
  • You have a loss and received a Form 1099-S.

See links below

Sale of main home

IRS pub 523

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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1 Reply
PaulaM
Employee Tax Expert

Do I get to claim contractor expenses in adjusted costs for sale of home?

Yes, you would include the costs of improvements to your home's basis. But you may not need to enter the sale of your primary home at all. 

You may qualify to exclude from income all or part of any gain from the sale of your primary residence if you meet ownership and use tests. This means for the 5-year period ending with the sale of the home, you lived in it as your main home and you owned it for 2 years.

If you meet both tests, you may exclude up to $250,000 ($500,000 on joint returns) of gain from your income, and you would not report it on your return.

Do not report the sale of your main home on your tax return unless:

  • You have a gain and do not qualify to exclude all of it,
  • You have a gain and choose not to exclude it, or
  • You have a loss and received a Form 1099-S.

See links below

Sale of main home

IRS pub 523

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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