What can I deduct from my home’s sale price?

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Q. I am claiming a refund of part of the New Jersey Gross Income Withholding – the 2 percent exit tax – on the sale of my home. In calculating my gain from the sale, can I deduct the commissions I paid to sell the house?
— Homeseller

A. Yes.

The sales commission on the sale of your home can be deducted, as can any other selling expenses you may have incurred when selling your home.

Examples of these expenses include advertising expenses incurred to list your home for sale and legal fees incurred in selling your home, said Howard Hook, a certified financial planner and certified public accountant with EKS Associates in Princeton.

Other costs can also be used to reduce your gain on the sale.

“These costs add to your original cost of the property you are selling,” Hook said. “Examples of this include settlement fees or closing costs when you bought your home and improvements made to your home that still existed at the time of your sale.”

Lastly, if the home was your primary residence for at least 24 months out of the last 60 months leading up to the date of sale, you may be able to exclude up to $250,000 for single filers or and $500,000 for married filers after deducting all of the expenses mentioned above, Hook said.

“There are some other eligibility requirements that you must meet to take this exclusion which can be found in IRS Publication 523,” he said. “New Jersey also allows for this exclusion amount based on the Federal eligibility requirements.”

Email your questions to moc.p1563257352leHye1563257352noMJN1563257352@ksA1563257352.

This story was originally published on June 19, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.