My client sold his residential home that he owned for 13 months and lived there 12 months out of the 13 months. The remaining month it sat empty. Am I correct by saying all his closing cost/fees, property taxes, mortgage interest, HOA dues, Insurance, utilities, repairs, maintance etc. can be included in his cost basis? If so can he only use these exps in his cost basis when he was not residing there or does it not matter since he will not qualify for the capital gains exclusion on residential property? Which form would I use to report the sale?
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In the state the current housing market is in, it's hard to imagine a gain for anyone holding property for such a short period of time. Having said that, I guess it's still possible. However, after factoring in the sales commission, are you sure there's still a gain? No, you can not add utilities, repairs, maintenance or insurance to his basis.
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