Belt Auction

Do real estate agents fees get deducted before any capital gains liability on home sale?

We believe we are liable for taxes on the sale of our main home as it has risen more than the $500k allowance for a married couple (see earlier question). Can we deduct real estate agent fees before calculating the capital gains tax liability?

Public Comments

1. Yes, they are. So are a lot of other things. Basically, your "gain" is your selling price, minus your purchase price minus upgrades and improvements, minus purchase fees, minus selling fees...basically minus anything that you weren't able to claim against your taxes like mortgage interest and RE taxes. But, please, don't take my word for it. Everything you ever wanted to know about selling your house is at the IRS link attached. Congrats big time on having such a nice gain!
2. You can deduct the settlement costs from both the purchase AND sale of your old home, plus the cost of any capital improvements you made to your home over the years. Go to the IRS website and do a search for "Sale of Home" - the instructions should be there, as well as the rules for treating the exclusion when it's over the limit. I would suggest you consult with a licensed accountant this year.