Deductible items from Seller's Final Settlement Statement

Forum|Forum|3 years ago
February 8, 2023
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Hopefully these are my last questions... I sold a house last year, that I had been renting out for several years.

I never lived in this house.
I am using TurboTax Premium Desktop for Windows.

I am trying to determine which items from the Seller's Final Settlement Statement (which I got from the title company) are deductible from the Sales Price?? Based on a post that @Carl11_2 made in July 4, 2019, it looks like, at a minimum, the Commissions, title insurance, escrow fees, transfer taxes, maybe a couple of others...
What about the $30,000 that the broker spent in Home Prep for sale?? Do those count as Ad Expenses??

Second, where do these expenses actually get listed??
I was going to list them in Asset Sales Expenses on the Sales Info page.
However, @Carl11_2 in his post, said this:
"No. it [the deductible expenses] is not deducted from the sales price. It's added to your cost basis."
So where *is* the cost basis entered? The only place that I see a Cost field is in the Review Info dialog, and that *does* have the expected cost basis value, but it doesn't have a label that could confirm this. Sadly, searching in TTP for 'cost basis' turns up nothing useful.

Carl11_2

Employee

Did you receive an actual HUD-1 Settlement Statement at the closing? If yes, confirm it's the same version as the one at https://www.hud.gov/sites/documents/1.PDF

The "OMB Approval No." is in the top right corner. Does it match? If not, then what approval number do you have?

Basically, for you as the seller, costs associated with selling the property are referred to as sales expenses. They include things such as staging fees, (which may or may not be shown on the closing statement) and of course the realtor's commission you paid from your gain, as indicated on the HUD-1 lines 703-704, as shown in the block under the column for "Paid from seller's funds at closing". Note the line numbers may be different if you don't have HUD-1 Settlement Statement with Approval No. 2502-0265 in the upper right corner of that form.

derelictAuthor

Actually, no... I do *not* have a HUD-1 document... I was going to ask about that; you kept referring to a HUD-1 document, but I don't have that...
the SFSS that I have, from the title company, only has one document number on it:
520-SCC-22102648-81 / 99
but I think that is a Santa Clara County document...
The only other official-ish document that I have is a Substitute Form 1099-S, but that only shows closing date and Gross Proceeds, nothing else...
I'll ask my agent about the HUD-1 ...

Later note:
I looked up HUD-1 online, and at the Consumer Finance Protection Bureau website, they have this note:
"If you applied for a mortgage after October 3, 2015, for most kinds of mortgage loans you receive a form called the Closing Disclosure instead of a HUD-1."

So that may be the situation I have here... This SFSS document is probably the Closing Disclosure...

Carl11_2

Employee

The SFSS has all you need on it, and some stuff/information you don't need for taxes. So I can't help with the details since there's no fixed format for the "new and better" closing statement. Basically for the seller, costs associated with selling the property are claimed/deducted as sales expenses. This includes, and is not limited to, commissions, staging fees, and advertising costs. Any costs you paid that are directly associated with your disposition of the property are also deductible. Examples would include title transfer fees paid at the courthouse. But generally, it's the buyer that pays the courthouse fees. From the buyer's perspective, those costs are referred to as the property acquisition fees.