Question

When reporting cost basis and profit of house sale do you include fees, land taxes paid ect?

Forum|Forum|4 years ago
February 1, 2022
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Reporting Cost Basis

For reporting capital gains on house and then land they ask for the cost basis. Do they want just cost of house, or all the fees, land taxes I paid due at closing adding into that figure, and if so how can I then deduct the fees of land taxes ect paid back out later?

Reporting amount you then SOLD land or house for/ or profit

They will probably then ask for amount I sold it for or the profit amount, and again my 1099-S show GROSS profit but that is not how much I made after land taxes, settlement fees. Do you report the gross from 1099-S and if so where do you deduct all the fees and land taxes after?

I wish I had the screenshot in front of me for all the questions they will ask regarding reporting the capital gains on the house and then land separate, but I don't

TurboTax Live Self-Employed Online

ColeenD3

Different screens ask for information in various ways, depending on if it is a rental, a primary home, or a second home.

Cost basis is the original purchase price including settlement fees. If you deducted property taxes each year, you can't include them in the basis.

Items added to basis.

You can include in your basis the settlement fees and closing costs you paid for buying your home. A fee is for buying the home if you would have had to pay it even if you paid cash for the home. The following are some of the settlement fees and closing costs that you can include in the original basis of your home.

Abstract fees (abstract of title fees).

Charges for installing utility services.

Legal fees (including fees for the title search and preparation of the sales contract and deed).

Recording fees.

Surveys.

Transfer or stamp taxes.

Owner's title insurance.

Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, the cost for improvements or repairs, and sales commissions. If the seller actually paid for any item for which you are liable and for which you can take a deduction (such as your share of the real estate taxes for the year of sale), you must reduce your basis by that amount unless you are charged for it in the settlement.

Sales price includes closing costs. Please see this LINK for a more in-depth description.

M

Macy522Author

I now understand the cost basis we paid for the house includes and record fee or transfer fee in it.

I apologize, even with your answer I am still very confused on the proceeds we report from when we sold the second home and then the land.

Example: Your 1099-S reports a gross profit from sale of second house of 66,000

But out of that gross 66,000

You paid 5276.25 in closing costs

You paid 635.12 in land taxes up front

After that, you really only profited 60,088.63

So please let me ask again, do I enter in that 66,000 gross profit from 1099-S but then I will be prompted to deduct the land taxes and closing costs to reduce those proceeds to the 60,088.63 I really earned?

Or just put the 60,088.63 as my profit from the start. I'm sorry I didn't understand the first time you tried to explain this, I am better with figures and examples given.

PatriciaV

Employee

Yes, your profit from the property sale would be the gross proceeds less the selling expenses.

In TurboTax, you enter your gross proceeds as the Sales Price and your closing costs (see below) as the Sales Expenses.

Here is a list of closing items that may be helpful: Selling Expenses

Other items paid from the cash at closing, like property taxes, are reported separately from the property sale. For instance, prepaid property taxes are reported under Deductions either for Schedule A (Itemized Deductions) or Schedule E (Rental Properties).

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