Sale of second home, making sure I'm filling this out correctly

[acarlso1]

Back story; bought our first home in 2007, lived there as our primary residence till 2017 where we bought our current home. My in-laws moved into our first home, we didn't really consider it a rental. We sold our first home last year, am I filling out this investment form correctly (screenshot below)? We weren't given a 1099-S

Original purchase: $86,500

Upgrades to first home: $3,700 (added central air)

Total Amount Paid: $91,200

Sold: $125,000

Paid for closing costs: $5,000

Realtor fees: $7,500

Proceeds: $112,500

I did these calculations based off of this article. https://smartasset.com/taxes/capital-gains-on-sale-of-second-home 

Thoughts? Am I right or close on this?

[PaulaM]

The date for the investment should be 2017 since that marked the end of your primary residence usage and the beginning of its use as a second home. 

[acarlso1]

ok, thank you. Are the numbers I'm using correct? 

[PaulaM · Accepted solution]

I would look over your home records from 2007-2023. You likely have more expenses over that time span that will increase your cost basis and thus lower/eliminate your gain. 

These would be expenses like the air conditioning you added that add/or improve the value of the property. Normal maintenance and repairs wouldn't qualify. Things like fencing, landscaping, roof, additions, etc. 

[acarlso1]

Thanks again. Adding central AC is probably the only thing that added value. Everything else was normal maintenance or appliance replacement

In 2016, while it was still our primary residence we refinanced; can we add that cost to lower our proceeds?

[AmyC]

No, refinancing your main or second home does not add to the basis. Fencing, landscaping, adding a room, things that improve the value, add to the basis.