Deductible Expenses when Selling a Home

Tuesday, August 1, 2023   /   by April Castillo

Deductible Expenses when Selling a Home

When selling a home, there are certain expenses that may be deductible, depending on various factors such as the use of the property and the circumstances of the sale. Here are some common expenses that may be deductible when selling a home:

Selling Costs: Certain costs directly related to the sale of the property may be deductible. These can include real estate agent commissions, attorney fees, title insurance, escrow fees, advertising costs, and inspection fees.

Home Improvement Expenses: If you made qualifying home improvements or renovations before selling your home, some of those expenses may be deductible. These expenses can include the cost of additions, upgrades, or enhancements that directly improve the property's value or extend its useful life. It's important to note that routine maintenance or repairs are generally not considered deductible.

Capital Gains Tax Exclusion: If you meet the eligibility requirements, you may be able to exclude capital gains from the sale of your primary residence from your taxable income. As of the current tax laws, you can exclude up to $250,000 of capital gains ($500,000 for married couples filing jointly) if you have owned and used the property as your primary residence for at least two out of the five years preceding the sale. This exclusion can result in significant tax savings.

Home Office Deduction: If you used a portion of your home exclusively for business purposes and claimed a home office deduction in previous years, you may be subject to a partial recapture of the depreciation you claimed. The recaptured depreciation can potentially increase your taxable income.

It's important to note that tax laws can change, and the specific deductibility of expenses when selling a home can vary based on individual circumstances and local regulations. It's recommended to consult with a tax professional or accountant to understand the specific deductions available to you and to ensure compliance with applicable tax laws.

The Sexton Property Group at Keller Williams Realty Yuma
Ed Sexton
2553 East 24th St
Yuma, AZ 85365
Daniel Jackson
Senior Loan Officer
NMLS# 169485
Office: 928-726-7266
Cell: 928-550-8744
Fax: 928-792-2231

Daniel Jackson NMLS #169485 | Nova Home Loans NMLS #3087 | BK#0902429 | Equal Housing Opportunity

This data is provided by the Yuma Association of REALTORS®, Inc. Multiple Listing Service. Real Estate listings held by brokerage firms other than Ed Sexton - The Sexton Property Group / Keller Williams Realty Yuma are marked with the Broker Reciprocity (SM) logo or the Broker Reciprocity thumbnail logo. This information is deemed reliable, but not guaranteed.
This site powered by CINC: