No, the adjusted home cost is not on your closing document. It's an amount you come up with.
The adjusted basis of your home is the original purchase price, plus certain settlement fees paid at time of purchase, and the cost of any improvements you've made over the years and also improvements made to the home prior your sale.
For a detailed explanation of items that can be added to your original basis to arrive at your adjusted basis, please see IRS Publication 523, Selling Your Home.
When you sell the asset, your cost basis gets subtracted from the money you collect from the sale. Instead of paying tax on the full amount, you only get taxed on the profit (the selling price minus the cost basis).
The following items are some of the settlement fees or closing costs you can include in
the basis of your property.
- 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.
- Any amounts the seller owes that you
agree to pay, such as back taxes or interest, recording or mortgage fees, charges
for improvements or repairs, and sales
commissions
