Sale of Land

[cmartino0900]

I purchased a one acre lot in July 2022 for $27,000 and took out a mortgage to purchase it. I sold it in May 2024 for $47,500. Can I deduct the remaining mortgage balance and the seller fees on my federal income taxes?

[DoninGA]

You cannot deduct the mortgage balance as a Selling Expense/Cost.

Selling cost can include escrow fees, legal fees, real estate agent commissions and advertising costs.

Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)

[Mike9241]

the mortgage is never part of the gain or loss

your gain is $47,500 minus selling and certain closing expenses minus the $27,000 increased by certain closing costs on acquisition like title fees.