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posted Jun 1, 2019 12:51:16 AM

Tax Year Prior to 2020: Are Closing Costs considered sales expenses when selling a home? Also there is a line that says seller credit per contract where we had to pay $4000.00. Does that count

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Level 5
Jun 1, 2019 12:51:17 AM

Some closing costs are selling expenses (see below).  Regarding the Seller Credit, it depends on what it includes.  Usually a "credit" means that it's something provided/paid to you, not paid by you.  You might want to confirm with the title company or real estate agent to find out exactly what that credit includes.

 You can deduct the items listed below in Sales Expenses. You cannot deduct normal maintenance items, but you can deduct expenses to prepare the home for sale.

Sales expenses are listed in the sellers column of your settlement statement and 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
  • any fees for a service that helped you sell your home without a broker (listing fees, promotional fliers, etc.) 

Sales expenses do not include:

  • mortgage payoffs
  • home equity loan payoffs
  • rent-back costs
  • payoff to creditors
  • property taxes
  • home owner association fees

Is the Sale of My Main Home Taxable?

https://ttlc.intuit.com/replies/3300213

 

If all of the following apply, you don't need to report it.

  • You lived in the home as your main home for at 2 of the 5 years preceding the sale.
  • Your "net" profit from the sale is less than $250,000 ($500,000 if Married Filing Jointly).
  • You didn't take depreciation deduction on the home or use it for business during the time you owned it.
  • You didn't rent it out at any time that you owned it.
  • You didn’t receive a Form 1099-S.

Where to enter the sale of your home  (if required) in TurboTax: While inside the software and working on your return, type sale of home in the Search at the top of the screen (you may see a magnifying glass there).  There will be a popup that says Jump to sale of home.  Select that to get to the general area.