Yes, Real Estate Commission Fees are Tax Deductible

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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Topic:
Real Estate Market Trends
Location:
California Santa Clara County San Jose
Groups:
At Home with Cultural Diversity (AHWD)
Christian Mortgage and Real Estate Professionals
Advice for Sellers
San Jose Real Estate
Cupertino Real Estate
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michelle carr crowe
michelle carr
closing costs
costs of selling a home
real estate commission fees are tax deductible
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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!

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

Nov 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.

Nov 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
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Family Helping Families Buy & Sell Homes 40+ Years

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

Nov 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

Nov 26, 2012 12:17 AM #5
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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

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