Just as the buyer wants to know the nitty-gritty of the property he is about to buy, you as the seller might also want to be informed of any hidden costs you might be charged without prior notice.
Here are four tax deductions you should know as a property seller.
Deductions for moving out
You can actually deduct your moving expenses from your gain, Yahoo! Real Estate News says. Your travel costs, lodging costs, transportation costs and storage costs, among others, can be the expenses you can deduct.
Deductions renovating some parts of your home
According to Dr. Kimberly R. Goodwin, associate professor of finance and the Parham Bridges Chair of Real Estate at the University of Southern Mississippi, if home improvements are done within three months of the closing, these expenses are part of the selling costs and are actually deductible. Forbes suggests you renovate your house not for your own but for another owner. Although home improvement takes another expense, it can actually help you market your property.
Deductions for consultations and legal services and other costs for selling your property
According to Nolo Law For All and Zack, you can deduct your legal fees, advertising costs, real estate agent commissions, escrow costs, title insurance cost and inspection fees from your sales gain. Moreover, if you sell your property because of unforeseen occurrences like change in health, change of job, or even divorce, you can request for a partial exclusion, reveals Vanessa Borges, an agent and tax preparation supervisor in Tax Defense Network.
Deductions for Equity Loan Interest
Nolo Law For All advises that you can deduct the interest you pay on your loan. If the married couple have filed separately, each member can have a $50,000 credit line or $100,000. This amount is based on International Revenue Service calculations. The IRS has a limit on the credit line you can take as "home equity."
