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Submitted By: Amy
Answered: July 27, 2015 11:19 am
Answered: July 27, 2015 11:19 am
Several years ago we bought land and built a vacation home on it. Now we’re selling it. What is our cost basis for purposes of determining gain or loss?
When you sell property, the difference between what you receive and your tax basis in the property produces gain or loss. When selling property, include what you paid for this, such as the land and the cost of constructing the home as well as the initial closing costs (e.g., attorney’s fees, etc.).
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Deductions
Items directly reducing income. Personal deductions such as for mortgage interest, state and local taxes, and charitable contributions are allowed only if deductions are itemized on Schedule A, but deductions such as for alimony, capital losses, moving expenses to a new job location, business losses, student loan interest, and IRA and Keogh deductions are deducted from gross income even if itemized deductions are not claimed.
