Publication 523 - Selling Your Home - 2003 Page 6
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312) Charges for installing utility services,
Real estate taxes. Real estate taxes for the year you
bought your home may affect your basis, as shown in the
3) Legal fees (including fees for the title search and
following chart.
preparing the sales contract and deed),
IF...
AND...
THEN the taxes...
4) Recording fees,
you pay taxes
the seller does
are added to the
5) Survey fees,
that the seller
not reimburse
basis of your
6) Transfer taxes,
owed on the
you
home.
home (the
7) Owner’s title insurance, and
the seller
do not affect the
taxes up to the
reimburses you
basis of your
8) Any amounts the seller owes that you agree to pay,
date of sale)
home.
such as:
the seller paid
you do not
are subtracted
a) Certain real estate taxes (discussed later),
taxes for you
reimburse the
from the basis of
(the taxes
seller
your home.
b) Back interest,
beginning on
you reimburse
do not affect the
c) Recording or mortgage fees,
the date of
the seller
basis of your
sale)
d) Charges for improvements or repairs, and
home.
e) Sales commissions.
Construction. If you contracted to have your house built
Some settlement fees and closing costs you cannot
on land you own, your basis is:
include in your basis are:
1) Fire insurance premiums,
1) The cost of the land, plus
2) Rent for occupancy of the house before closing,
2) The amount it cost you to complete the house, in-
cluding:
3) Charges for utilities or other services related to occu-
pancy of the house before closing,
a) The cost of labor and materials,
4) Any fee or cost that you deducted as a moving ex-
b) Any amounts paid to a contractor,
pense (allowed for certain fees and costs before
c) Any architect’s fees,
1994),
d) Building permit charges,
5) Charges connected with getting a mortgage loan,
such as:
e) Utility meter and connection charges, and
a) Mortgage insurance premiums (including VA
f) Legal fees directly connected with building the
funding fees),
house.
b) Loan assumption fees,
Your cost includes your down payment and any debt
c) Cost of a credit report,
such as a first or second mortgage or notes you gave the
seller or builder. It also includes certain settlement or
d) Fee for an appraisal required by a lender, and
closing costs. You may have to reduce your basis by points
the seller paid for you. For more information, see
6) Fees for refinancing a mortgage.
Seller-paid points and Settlement fees or closing costs,
earlier.
Built by you. If you built all or part of your house
yourself, its basis is the total amount it cost you to complete
it. Do not include in the cost of the house:
•
The value of your own labor, or
•
The value of any other labor you did not pay for.
Temporary housing. If a builder gave you temporary
housing while your home was being finished, you must
reduce your basis by the part of the contract price that was
for the temporary housing. To figure the amount of the
reduction, multiply the contract price by a fraction. The
numerator is the value of the temporary housing, and the
denominator is the sum of the value of the temporary
housing plus the value of the home.
Page 6
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