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I sold a house and purchased a new home last year.

What things are deductible when I sell and purchase a home.
1 Reply
Intuit Alumni

I sold a house and purchased a new home last year.


Generally, the gain is the sales price minus the basis. The basis of property you buy is usually its cost, including the purchase price and any costs of purchase, such as commissions. You may not be able to use the actual cost as the basis if you inherited the property, got it as a gift, or received it in a tax-free exchange or involuntary conversion or in connection with a “wash sale.” If you don't use the actual cost, attach an explanation of your basis. The basis of property acquired by gift is generally the basis of the property in the hands of the donor. The basis of inherited property is generally the fair market value at the date of death.

Sales Price

If you didn't receive a Form 1099-B or 1099-S (or substitute statement) for a transaction, enter in column (d) the net proceeds. The net proceeds equal the gross proceeds minus any selling expenses (such as broker’s fees, commissions, and state and local transfer taxes). 

For the new home, just enter you mortgage interest, property taxes, points and PMI if any:

Click on Federal Taxes (Personal if using Self-Employed)

•        Click on Deductions and Credits

•        Click on I'll choose what I work on (if shown)

•        Under Your Home

•        On Mortgage Interest, click on the start or update button

Any amounts paid for closing costs upon purchase are discussed as follows.

The only settlement or closing costs you can deduct are home mortgage interest and certain real estate taxes. You deduct them in the year you buy your home if you itemize your deductions. You can add certain other settlement or closing costs to the basis of your home.

Items added to basis. You can include in your basis the settlement fees and closing costs you paid for buying your home. A fee is for buying the home if you would have had to pay it even if you paid cash for the home. The following are some of the settlement fees and closing costs that you can include in the original basis of your home. Abstract fees (abstract of title fees). Charges for installing utility services. Legal fees (including fees for the title search and preparation of the sales contract and deed). Recording fees. Surveys. Transfer or stamp taxes. Owner's title insurance. Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, cost for improvements or repairs, and sales commissions. If the seller actually paid for any item for which you are liable and for which you can take a deduction (such as your share of the real estate taxes for the year of sale), you must reduce your basis by that amount unless you are charged for it in the settlement. Pub 530

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