Will fees I pay for pre-sale home cleaning and hauling reduce my capital gains tax obligation?

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Question

I am in the process of preparing my home for sale. Having lived here for 23 years, it has gone up quite a bit in value, even after some ups and downs in the real estate market. I'm afraid I'm not much of a housekeeper, so the first thing my real estate agent did upon setting foot in the door was to pull out her cell phone and start calling cleaning people and a hauling company.

Now I'm expected to foot the bill for all this. (You should have seen the size of the hauling truck!) Can I at least add these to my list of selling expenses, which I understand will lower my capital gains tax obligation?

Answer

The cost of cleaning a home to help make it attractive to potential buyers is not deductible from the proceeds received from the sale. Nor can it be added to your home's cost for tax purposes (its "adjusted basis" in tax parlance).

In short, home cleaning expenses have no tax benefit. The only home sale expenses you can deduct are those that don’t physically affect the property, such as real estate broker commissions and various other fees involved in selling such as escrow fees, settlement costs, attorney fees, and so forth.

You'll have to take comfort in the fact that a clean, move-in ready home will be more appealing to buyers, and will hopefully command a higher price. Also see "Avoiding Capital Gains Tax When Selling Your Home: Read the Fine Print" for more tips on dealing with the expected profits from your sale.

by: , J.D.

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