Home Sold Tax Claim Question

[wariles]

What is the name of your state (only U.S. law)? IL

Sold my house [finally] in Washington state this past year. Due to the market conditions I took on the burden of paying the buyer's closing costs. This is not typically the standard in Washington, but given where the housing market was this was the avenue I had to go. One partial softening blow was that I was under the impression I would get tax relief.

I am interested in claiming this additional cost on my Federal Tax Return. However, all the reference material I see from the Feds discusses closing costs from a buyer's perspective.

Complicating the matter is that this money was included in the transaction [it might have been cleaner to hand them a check outside of the contract]

I have the closing documents which show a reduction in the home's price by the amount called out as buyer's closing cost paid by the seller.

So the question is, where if possible can I claim this amount on my Federal Tax return?

Thanks for any guidance you provide

[LdiJ]

Originally Posted by wariles

What is the name of your state (only U.S. law)? IL

Sold my house [finally] in Washington state this past year. Due to the market conditions I took on the burden of paying the buyer's closing costs. This is not typically the standard in Washington, but given where the housing market was this was the avenue I had to go. One partial softening blow was that I was under the impression I would get tax relief.

I am interested in claiming this additional cost on my Federal Tax Return. However, all the reference material I see from the Feds discusses closing costs from a buyer's perspective.

Complicating the matter is that this money was included in the transaction [it might have been cleaner to hand them a check outside of the contract]

I have the closing documents which show a reduction in the home's price by the amount called out as buyer's closing cost paid by the seller.

So the question is, where if possible can I claim this amount on my Federal Tax return?

Thanks for any guidance you provide

Normally the expense of paying the buyers closing costs would be deducted from the sales proceeds so that you would have a smaller capital gain, and therefore smaller capital gains tax.

However, if this was your primary residence, then you are able to exclude 250k in capital gain (500k if married) therefore you are not paying any tax on your gain. Therefore to try to take any other deduction would be a "double dip".

[Dandy Don]

If you don't understand this completely, consult a local CPA or tax return preparer for clarification and advice.

[wariles]

Thought that may be the anwer - thanks for the aid