Where do I find sales expenses on my settlement statement for a house I sold last year? Would this be 'settlement charges' to seller on line 1400?

[DavidD66]

There is no single category or line item that makes up your sales expenses on a settlement statement.  It depends on what expenses you incurred, and how they were reported.  Additionally, you may have incurred sales expenses that were not reported on your settlement statement, such as marketing costs.  As for the items on your settlement statement, you can generally deduct all of the expenses that were incurred to sell the house, close the sale.  These include commissions, closing costs you paid on behalf of the buyer, document fees, etc.  You do not include property taxes, HOA fees and assessments, and other assessments.  

[Mike9241]

do you realize closing statements are not standardized so maybe they are maybe they're not? why not tell us what the description is for each line no need for amounts. then we can better answer.

[Solar Eclipse]

Sorry, but I think a statement in this thread may not be accurate: "You do not include .... HOA fees....."

There is one fee that is very common during closing involving HOA's. It goes by different names but a common name is Estoppel fee.  This fee is for the HOA to provide a document that verifies any HOA-related issues with the property.  It is usually required by lenders and/or title/insurance companies to close the sale.  So I would contend this fee is indeed an includable seller expense.

I'd appreciate it if any tax experts on the forum would opine on this view.

SE

[PaulaM]

Yes, a required HOA estoppel fee would be included as a sales expense. Answered on other threads @Solar Eclipse 

[Solar Eclipse]

Thanks Paula.  I've found literally dozens of replies on this forum going back years that are all replies from members or experts using the same boiler-plate text of valid and non-valid sales expenses. It seems this was taken directly from the FAQ/explanation inside the TT product a few years ago. It is as follows:

Selling expenses are costs directly associated with selling your home. They include:

• sales commissions 
• fees for a service that helped you sell your home without a broker
• legal fees
• mortgage points or other loan charges that you paid that would normally have been the buyer's responsibility

Note that selling expenses do not include:

• mortgage payoffs
• home equity loan payoffs
• rent-back costs
• payoff to creditors
• property taxes
• homeowners' association (HOA) fees

So you can appreciate how confusing this now is for forum members to figure out whether an HOA Estoppel fee is an includable expense.  So far you are the only source I've found on the forum that is confirming the Estoppel fee as an includable expense.

SE

[PaulaM]

Normal yearly operational HOA fees would not be included in basis or sellers expense. The lender-required one-time estoppel fee is not considered a normal operational expense, in my opinion and would only arise in the context of a sale. Therefore, it is distinct from regular yearly HOA fees and should be treated accordingly.
 

However, if you wish to take a more conservative approach, you could opt to exclude it altogether.

[Solar Eclipse]

Thanks Paula.  I agree with your view on the HOA Estoppel fee.  I feel the vast majority of the confusion in the past on the forum was related to a terminology detail - that being the improper use of the general word 'fees' instead of using proper terms like 'dues', 'assessments', etc.   Ongoing HOA costs incurred as part of belonging to an HOA are different than a 1-time charge required to close on a sale of a property like the Estoppel. The estoppel is somewhat like an HOA equivalent of a title search - to make sure things are clear and not clouded in order to close the transaction.

If you have the ability to ping one of your associates and have them chime in to offer/confirm the view on this it would be beneficial to us readers who otherwise see years of what seem to be conflicting/confusing guidance on the forum.

SE