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Old 04-11-2020, 01:45 AM
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EricKei EricKei is offline
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Mkay. Thanks!
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  #12  
Old 04-16-2020, 05:07 AM
SpyOne SpyOne is offline
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A thought on how closing costs from 15 years ago could be relevant to this year's taxes:

As I understand it, if you sell your house for more than you paid for it, you owe taxes on that profit. Perhaps closing costs count as part of the purchase price? So you need them to compute how much profit was made?

I'm just guessing.
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  #13  
Old 04-20-2020, 09:59 PM
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taxguykarl taxguykarl is offline
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Quote:
Quoth SpyOne View Post
As I understand it, if you sell your house for more than you paid for it, you owe taxes on that profit. Perhaps closing costs count as part of the purchase price? So you need them to compute how much profit was made?
The "profit" as you call it is a capital gain. The points, as well as any expenses to fix up the house prior to selling (and the original purchase price and realtor's fees) are part of the basis for this calculation.
If the capital gain on a primary residence is less than $250,000 ($500,000 for married filing jointly) there is no federal tax on that gain--some states on the other hand. Yes even if the capital gain is not spent on a new home (there is also no deduction if that is sold at a loss). These sales must be reported even if there is taxable income resulting.
Keep in mind that this only applies to primary residence, selling rental property is just like selling stock....the tax implications anyway.
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