The IRS Rule That Most Home Sellers Don’t Know

The IRS Rule That Most Home Sellers Don’t Know
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Dear Monty: We recently sold our home. We have prepared and filed our tax returns in the past. Next year for our 2023 return, we are considering having an accountant file our return. Adding a home sale into the tax forms is a bit intimidating. Our primary concern is regarding what is tax deductible when selling a home. We would appreciate your insights.
Monty’s Answer: Interpreting the tax code can be a challenging task. Selling a home is likely the most complicated task in the code for the average taxpayer. IRS Publication 523 is one of many publications published by the IRS. It is a guide to inform homeowners who are selling their homes.

A Quote From The Tax Guide

Here is a quote in the guide referring to your concern: “There is no tax deduction for transfer taxes, stamp taxes, or other taxes, fees, and charges you paid when you sold your home. However, if you paid these amounts as the seller, you can treat these taxes and fees as selling expenses. If you pay these amounts as the buyer, include them in your property cost basis.”
Richard Montgomery
Richard Montgomery
Author
Richard Montgomery is the founder of PropBox, the first advertising platform to bring home sellers and buyers directly together to negotiate online. He offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty or DearMonty.com
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