sale of second home

[mandy]

when you sell a second home, can you add to (cost or selling cost) basis the amount due to pay of the mortgage which is listed on the settlement statement as reductions in amount due to seller, which includes earnest money, settlement charges to seller, payoff of mtg loan, possession escrow, country taxes, seller paid closing cost credit. Can all of the above be added to the expense of sale of second residence?


Thanks your your help,

[JCH]

I think you're trying to bring too many items into the equation to compute the gain. Start with the original purchase price of the home, and then take a look at the chart on page 6-2 of TTB. The amount of the mortgage really doesn't have much to do with computing gain, if I'm reading your question correctly.

[mandy]

Ttb 6-2

I think you're trying to bring too many items into the equation to compute the gain. Start with the original purchase price of the home, and then take a look at the chart on page 6-2 of TTB. The amount of the mortgage really doesn't have much to do with computing gain, if I'm reading your question correctly.

Thanks for your response, but I don't have access to TTB page 6-2, how can I get that information? Thanks again....

I don't really think the loan is deductable, because wouldn't that be part of the cost to purchase to properyt?

[Davc]

Thanks for your response, but I don't have access to TTB page 6-2, how can I get that information?

Buy the book.

[gkaiseril]

See IRS Pub 523

Download, http://www.irs.gov/pub/irs-pdf/p523.pdf , IRS Pub 523 It discusses how to handle the various components of the closing cost. Note the county property taxes depend on who is responsible for the taxes and who pays the taxes. Pages 1- 9 include a lot of the information you will need. Since this is a second home and not the primary residence there is no exclusion of the gain, unless the 3 of 5 years rule is met..