Can I deduct seller's closing costs & fees when selling my primary residence?

Most of the articles you're reading are probably giving incomplete information. The truth is, for a primary residence sale, most closing costs are NOT tax deductible expenses. They're considered part of the "cost basis" of your home. When you sell your primary residence, you can exclude up to $250,000 of capital gain ($500,000 if married filing jointly) if you've lived in the home as your main residence for at least 2 of the last 5 years. If your gain falls under these thresholds, you typically don't need to report the sale on your tax return at all. What's happening is that selling expenses like agent commissions, legal fees, inspection costs, etc. are added to your original purchase price (plus improvements over the years) to increase your "adjusted basis." This reduces any potential taxable gain, but they aren't actually separate deductions that go on Schedule A.

I went through exactly the same confusion last year when selling my house! After hours going in circles, I finally got clarity using taxr.ai (https://taxr.ai) - it analyzed my closing statement and immediately identified which costs actually impact taxes and which don't. The site explained that selling costs like commissions aren't itemized deductions, but rather adjustments to your cost basis. Since my sale was under the capital gains exclusion, these costs ultimately didn't affect my taxes. But the taxr.ai tool showed me exactly how to calculate everything and what would happen if my sale had exceeded the exclusion amount. Way easier than trying to piece together conflicting articles!

I was initially skeptical about taxr.ai but decided to try it after struggling with this exact issue. Uploaded my HUD-1 closing statement and it instantly broke down which costs affected my basis and which didn't. The analysis showed me that while my $18,500 in realtor commissions and $3,200 in closing costs couldn't be deducted as separate expenses, they did adjust my home's basis. Since I was under the exclusion, it didn't matter tax-wise, but the peace of mind was worth it. The site even explained how each expense would be treated if I had been over the exclusion limit. Totally worth checking out if you're confused about home sale tax implications.

I know this isn't exactly answering your question about deductions, but here's a related issue I ran into: I needed clarification on some closing cost deductibility issues and kept getting conflicting answers. After wasting hours on hold with the IRS, I finally tried Claimyr (https://claimyr.com) and got through to an actual IRS agent in about 15 minutes. The agent confirmed everything the first commenter mentioned - most closing costs for selling your primary residence aren't separate deductions, they just adjust your basis. She walked me through exactly how to handle it on my return. If you need official clarification from the IRS, this service was a lifesaver. You can see how it works here: https://youtu.be/_kiP6q8DX5c

I have to eat crow here. After posting my skeptical comment, I was still desperate for answers about my home sale taxes, so I tried Claimyr as a last resort. I was SHOCKED when I got a call back in 20 minutes with an actual IRS agent on the line. The agent confirmed that my $22,000 in selling costs couldn't be itemized as separate deductions but would adjust my basis if I was over the exclusion amount (which I wasn't). She also helped me understand how to properly report a home office portion of my sale, which was causing me major confusion. Saved me from making a costly mistake on my return. Never thought I'd say this, but getting actual IRS guidance directly was incredibly valuable.

Just to add a bit more clarity - the reason those articles say "deductible" is because technically the closing costs reduce the taxable gain on your home sale. But they're not "deductions" in the traditional sense that would show up on Schedule A or elsewhere. Here's a simplified example: - Purchase price: $300,000 - Plus improvements over the years: $50,000 - Plus selling costs (commissions, etc.): $25,000 - Adjusted basis: $375,000 - Selling price: $500,000 - Gain: $125,000 ($500,000 - $375,000) Since this gain is below the exclusion threshold, no taxes are due. If your gain was above the threshold, those selling costs would effectively save you tax dollars by reducing the taxable portion.

I'm confused about one thing - what about property taxes and mortgage interest paid in the year of sale? Those ARE deductible on Schedule A, right? Or do those somehow get wrapped into this "basis" thing too?

This thread has been incredibly helpful! I was in the exact same boat as Chris - finding conflicting information everywhere about home sale deductions. After reading through all these responses, I finally understand that the confusion comes from articles using "deductible" loosely when they really mean "reduces taxable gain through basis adjustment." It's frustrating that so many sources don't make this critical distinction clear. For anyone else struggling with this: the key takeaway is that if your home sale profit is under the exclusion amount ($250K single/$500K married), your selling costs won't provide any tax benefit at all. They would only matter if you exceeded those thresholds. The exclusion itself is already a huge tax break, so we can't double-dip by also deducting the selling expenses separately. Thanks to everyone who shared their experiences and clarified the actual tax mechanics. This is definitely one of those areas where the IRS could make their guidance much clearer for regular homeowners!