Can I include in the "sales expenses" of my home the CA withholding tax that I paid at closing?

[Khai · Accepted solution]

No. CA withholding tax on the sale of your home is the amount expected to cover any tax liability that may arise from that sale. The following are a list of sales expenses that will reduce the profit made on the sale of your home:

• Commissions
• Legal fees
• Broker fees
• Appraisal fees
• Advertising fees
• Home inspection reports
• Owner's title insurance
• Transfer taxes
• Geological surveys
• Any amounts the buyer agrees to pay for the seller, such as 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
• HOA fees
• Property taxes

As a reference please see:

Sale of your home IRS – Topic 701

Selling your home IRS – Pub 523

[ALMAXANT]

Thanks!