Can a seller of a secondary vacation home deduct all settlement charges on the hud settlement statement from my 2018 taxes?

[Coleen3 · Accepted solution]

Not every settlement charge is deductible. If allowed, it is added to the basis of the home.

Sales expenses include:

 - commissions

 - appraisal fees

 - broker's fees

 - legal fees

 - advertising fees

 - home inspection reports

 - title insurance

 - transfer taxes or fees

 - geological surveys

 - loan charges (points) or other fees paid on the buyer's behalf

Sales expenses do not include:

 - mortgage payoffs

 - home equity loan payoffs

 - rent-back costs

 - payoff to creditors

 - property taxes

 - home owner association fees

[badart69]

what is Not every settlement charge is deductible. If allowed, it is added to the basis of the home. What is 'added to the basis of the home'? There is a purchase price and selling price. Where do you show these expenses?

[Coleen3]

There are many different categories of expenses that may be on the closing statement. Only the ones listed above can be added to the cost (basis) of the house.

Alternatively, to enter this sale of a second home in TurboTax Online or Desktop, please follow these steps:
1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on” (jump to full list)
4. Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
Choose type of investment you sold - select Second Home