What is the adjusted basis for home sold

[HelenaC]

Decreases to basis added in my answer.

[HelenaC]

[Information added 11:20 am PST 4-18-17]

Adjusted basis is cost basis plus increases and minus decreases. Increase the basis of any property by all items properly added to a capital account. These include the cost of any improvements having a useful life of more than 1 year.

The following items are some of the settlement fees or closing costs you can include in the basis of your property when you purchased it and when you sold it.

• Abstract fees (abstract of title fees); 
• Charges for installing utility services; 
• Legal fees (including title search and preparation of the sales contract and deed); 
• Recording fees;
•  Surveys; 
• Transfer taxes;
•  Owner's title insurance.

See the screenshot below for more examples.

Some settlement fees and closing costs you can’t include in your basis are:

• Fire insurance premiums,

• Rent for occupancy of the house before closing,

• Charges for utilities or other services related to occupancy of the house before closing,

• Any fee or cost that you deducted as a moving expense (allowed for certain fees and costs before 1994),

• • Charges connected with getting a mortgage loan, such as:

    1. Mortgage insurance premiums (including funding fees connected with loans guaranteed by the Department of Veterans Affairs),

    2. Loan assumption fees,

    3. Cost of a credit report,

    4. Fee for an appraisal required by a lender, and

  • Fees for refinancing a mortgage.

• Decreases to Basis The following are some items that reduce the basis of property. 
• Section 179 deduction. 
• Nontaxable corporate distributions. 
• Deductions previously allowed (or allowable) for amortization, depreciation, and depletion. 
• Exclusion of subsidies for energy conservation measures. 
• Certain vehicle credits. 
• Residential energy credits. 
• Postponed gain from sale of home. 
• Investment credit (part or all) taken. 
• Casualty and theft losses and insurance reimbursement. 
• Certain canceled debt excluded from income. 
• Rebates treated as adjustments to the sales price. 
• Easements. 
• Gas­guzzler tax. 
• Adoption tax benefits. 
• Credit for employer­ provided child care.   

See Publication 551 (Rev. December 2016) - IRS.gov  for additional information that may apply to your particular situation