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I am selling my home and want to know what parts of the selling costs can I deduct. I am paying for a termite inspection and treatment on the home that I am selling. I paid a 6% real estate comission. I paid the closing cost for the buyer of my property since it was to be purchased by a FHA loan.

I will be paying a title insurance on the purchase of new property. I have paid a 1% loan Origination fee for the purchase of a new property.


The answers to these and many other questions relating to the sale of your home can be found in IRS Publication 523 (available at http://ftp.fedworld.gov/pub/irs-pdf/p523.pdf).

In summary, you can deduct any additional mortgage interest and property tax paid at closing. Costs related to selling the home simply add to the basis. If you are excluding the gain on the sale of this home, that won't help you except as it may reduce your gain below the maximum allowed to be excluded.

Regarding buying a new home, any expenses related to purchasing the home that you would have owed if you had paid cash may be added to the basis.
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