Home Warranty purchased for the buyer- selling expense?

[n_j]

Hi,

Im calculating the capital gains tax owed on the sale of my primary residence. We purchased a home warranty for the buyers (paid through escrow). Can this be included as a selling expense?

thanks!

[MinhT1]

Yes.

[n_j]

I saw some mixed answers for similar questions posted by others. Some said it can't be deducted for primary residence so I wanted to make sure. 

[Opus 17]

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@n_j wrote:

I saw some mixed answers for similar questions posted by others. Some said it can't be deducted for primary residence so I wanted to make sure. 

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It's not a tax deduction.  What it really is, is a reduction in the selling price.  (If the home sold for $300,000 but you made a $10,000 seller concession, the selling price was really $290,000.  It doesn't matter if the sellers concession was for closing costs, repairs, or a warranty.)

If you don't have a 1099-S, then you could just report the lower selling price, but if you have a 1099-S the price needs to match, so you can enter the cost as a selling expense.   Entering the cost as a selling expense has the same effect on the capital gains calculation as lowering the selling price.