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I sold a house and paid closing costs. Can I deduct the closing costs?

Forum|Forum|6 years ago
May 31, 2019
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Also, in closing costs we paid property taxes, can I deduct those? We sold the house October 2014 and we paid all property taxes and mortgage insurance.

Best answer by Fern

You can deduct any mortgage interest or real estate taxes charged at closing. But, almost none of the closing costs incurred on a sale of a home are deductible. Other closing costs (Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, home inspection, flood certificate, attorney fees, etc.), instead of being deductible, reduce the sales price of the property.

Reducing the sales price does reduce the gain that you have on the sale. However, many people do not have to pay capital gains tax on their home sale because the IRS allows an exemption from tax for gains up to $250,000 ($500,000 if you're married and file jointly).

Turbo Tax will compute the exclusion amount for you. To enter the sale of your home:

• Select Federal Taxes
• Select Wages and Income
• Scroll down and select Show More at Less Common Income
• Select Start at Sale of Home

F

FernAnswer

Employee

You can deduct any mortgage interest or real estate taxes charged at closing. But, almost none of the closing costs incurred on a sale of a home are deductible. Other closing costs (Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, home inspection, flood certificate, attorney fees, etc.), instead of being deductible, reduce the sales price of the property.

Reducing the sales price does reduce the gain that you have on the sale. However, many people do not have to pay capital gains tax on their home sale because the IRS allows an exemption from tax for gains up to $250,000 ($500,000 if you're married and file jointly).

Turbo Tax will compute the exclusion amount for you. To enter the sale of your home:

• Select Federal Taxes
• Select Wages and Income
• Scroll down and select Show More at Less Common Income
• Select Start at Sale of Home

B

bwa

Employee

We sold the house October 2014 and we paid all property taxes and mortgage insurance.

If you paid the few deductible items in 2014 and have filed that year, you would need to go back and file an amended return. You can't claim them in 2016.