Yes, Real Estate Commission Fees are Tax Deductible

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Real Estate Agent with Just Call 408-252-8900 Lynbrook Homes Cupertino KW BRE# 00901962

Yes, Real Estate Commission Fees are Tax Deductible

by Michelle Carr-Crowe, Cupertino real estate agent selling Lynbrook High Homes in San Jose, Calif.

In every conversation about selling a home in Silicon Valley, the broker fee or commission is discussed and negotiated.

Although many clients often balk when calculating the commission fee, ("You'll make HOW MUCH!?"), in areas where homes sell slowly (or not at all), sellers are happy to pay a commission assuming the job will get done well and quickly.

Money passing hands image

However, clients often forget (or never knew) that in most cases real estate commission fees are tax deductible. After all broker fees are strictly a cost of selling.

To learn more, check out The IRS, Form 523 and the Costs of Selling a Home. Below you can see the links to calculate Amount of Gain or LossDetermining Basis, and more.

As always, consult a tax and/or legal professional before selling a home.

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Advice for Sellers
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costs of selling a home
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Rob Lang
At Home Kansas / www.AskRobLang.com - Lawrence, KS
Local Expert in Lawrence Kansas Real Estate Homes

Great reminder to your seller clients of real estate for sale in San Jose, Saratoga & Cupertino CA!

November 25, 2012 11:11 PM #1
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Michelle Carr-Crowe-Selling Silicon Valley Homes in Top Schools San Jose, Cupertino, Saratoga, Palo Alto-Just Call 408-252-8900
Just Call 408-252-8900 Lynbrook Homes Cupertino KW - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Rob, thank you for the kind words. Best of success to you in 2013.

November 25, 2012 11:25 PM #2
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Bob Crane
Woodland Management Service - Stevens Point, WI
Forestland Experts! 715-204-9663

Hi Michelle, it may seem like common sense to a business owner, but to others these costs of earning income are often overlooked.  I am sure that the costs are much more palatable when your clients realize that they can deduct them from the income that you have earned for them.

November 25, 2012 11:48 PM #3
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Michelle Carr-Crowe-Selling Silicon Valley Homes in Top Schools San Jose, Cupertino, Saratoga, Palo Alto-Just Call 408-252-8900
Just Call 408-252-8900 Lynbrook Homes Cupertino KW - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Bob, you are right. Some clients don't yet know this.

November 26, 2012 12:00 AM #4
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Shanna Day Mega Team Leader (UT & AZ)
Keller Williams SLC (UT) and Keller Williams Realty EV (AZ) - Park City, UT
Keller Williams Realty

Good point Michelle - I sometimes forget to include this when I have seller objections.  I'm glad you reminded me so that it will stick with me the next time.   I'll remind my listing agents on my team as well.   Thank you.  Shanna

November 26, 2012 12:17 AM #5
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