Tax Deductions Sellers Won’t Want 

to Miss

Learn which tax benefits you can take advantage of when selling your home. - 

when you sell a home and make a profit of less than $250,000 (or less than 

$500,000 when you file a joint return with your spouse).If you meet those

 qualifications,and if you have lived in that home for two of the five years before 

you sell, the IRS doesn’t want to hear about your home sale because the profit

 you make is excluded from being taxed under U.S. Code 121. 

And now for the deductions …

 The IRS grants some tax deductions for home sellers.

 Getting the deductions requires that you itemize your taxes, 

admittedly a tedious job, but one that is probably worth your while. 

Here are five tax deductions you should take for 2014.

1. Selling costs

If you don’t qualify for the 121 exclusion, you will owe taxes on any 

profit, so make sure you deduct all your selling costs from your gain.

You can deduct the following:

• Your real estate agent’s commission
• Legal fees
• Title insurance
• Inspection fees
• Advertising costs
• Escrow fees
• Legal fees

And there’s another consideration. You might qualify for a partial 

exclusion if you sell your home due to circumstances involving divorce, 

change in employment, change in health, or other unforeseen

 circumstances.

2. Moving deduction

If you have to sell your house because you’re relocating for work, you might be able to deduct some of your moving expenses, Deductions could include transportation costs, travel to the new place, storage costs, and lodging costs.

3. Property tax deduction

You can deduct your property taxes for the portion of the year that you 

owned the home. Deduct the taxes up to, but not including the date of 

the sale, according to the IRS. The buyer pays beginning from the sale date.

4. Home improvements

It’s a sad fact that you sometimes need to improve your home — 

not for your own benefit and enjoyment — but for the home’s future 

owners. If you make home improvements that help sell your home, and

 if they are made within 90 days of the closing, they are considered 

selling costs, which are deductible, according to Dr. Goodwin.

5. Points

If you paid points to lower your interest rate when you refinanced 

your home, you might qualify for an additional deduction.

Because you can deduct a proportional share of the points until the 

loan is paid, when you pay off the loan through a sale, you can 

deduct the remaining value of those points.