Home Selling Costs
Posted by taxguru on June 19, 2010
Q:
Subject: question about selling the house
Hi Sherry and Kerry,
My house is on the market. I know that I will have to pay for mold and radon mitigation. If I do the work now before I have a contract on the house, can I deduct the cost as an expense of selling.
A:
Those kinds of costs can be counted as either selling expenses or as additions to the cost basis of your home; both ways reducing your gain on the sale.
Whether this actually will save you any real income dollars will depend on the size of your profit. The first $500,000 of profit is completely tax free. Any profit above that $500,000 will be subject to long term capital gains tax.
I haven’t been following housing values in your area; so I’m not aware of what kind of profit you are expecting to make. If it will be less than $500,000, it will be tax free; so any additional costs you incur won’t save you anything in taxes.
I hope this helps and isn’t too confusing. Let me know if you have any more questions.
Kerry
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