Are closing costs considered an expense when SELLING a home?

Forum|Forum|1 year ago
March 13, 2025
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For the purpose of reducing capital gains on sale of a second home, most closing costs are considered selling expenses that can be used to reduce the gain, correct?

Much of the information and publications online seem to addresses the topic of closing costs primarily from the purchase/buyer perspective rather than seller perspective.

I believe typical seller's closing costs can be treated as selling expenses and reduce a capital gain, for example.

- Commissions

- Typical filing fees

- Owner's Title Insurance

- Transfer / Doc stamps

The total would typically end up under Code 'E' adjustment on 8949, essentially reducing the gain.

Best answer by ThomasM125

Yes, you can deduct those costs from the sale proceeds to arrive at your capital gain for tax purposes.

ThomasM125Answer

Yes, you can deduct those costs from the sale proceeds to arrive at your capital gain for tax purposes.

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Solar EclipseAuthor

Thanks for the timely response.

Not sure if this follow-up question warrants a separate post, but the one item I simply cannot find any confirmation as to being an includable closing cost is an HOA Estoppel fee. I've seen some opposing opinions online, even on this forum. It seem logical to me that if the Estoppel is a requirement for closing then the fee should be includable.

Anyone?