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Itemized Deductions Schedule-A


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Old 04-10-2014, 08:22 PM
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Question Settlement Charges and Costs - Sale of Property

Last year (2013) I sold property (the first time I have done so), and I am working with TurboTax. One aspect of the sale is settlement charges, which I had input as part of asset sales costs when prompted (it was a rental condo).

My fundamental question is whether settlement charges/costs of sale end up as a Schedule A deduction item. When I ran through the deductions portion of the TurboTax programs, TT decided that the Standard Deduction was the way to go, and in the 'overview of federal taxes' I note a 'Miscellaneous Deduction' listed that is very close to the settlement charges for the property sale (but not down to the last dollar). No other interpretation of this amount is obvious. All other info for deductions: state tax and property tax, are simple, so I am a bit hazy on this miscellaneous deduction.

Since this 'Miscellaneous Deduction' is a few thousand dollars, I want to understand fully just what it might be, lest something crept in that shouldn't. I haven't paid Turbo Tax yet, so it is not allowing me to see the forms, which may provide additional clues. Thanks in advance for your feedback.



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Old 04-11-2014, 05:36 AM
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Originally Posted by TXDM View Post
Last year (2013) I sold property (the first time I have done so), and I am working with TurboTax. One aspect of the sale is settlement charges, which I had input as part of asset sales costs when prompted (it was a rental condo).

My fundamental question is whether settlement charges/costs of sale end up as a Schedule A deduction item. When I ran through the deductions portion of the TurboTax programs, TT decided that the Standard Deduction was the way to go, and in the 'overview of federal taxes' I note a 'Miscellaneous Deduction' listed that is very close to the settlement charges for the property sale (but not down to the last dollar). No other interpretation of this amount is obvious. All other info for deductions: state tax and property tax, are simple, so I am a bit hazy on this miscellaneous deduction.

Since this 'Miscellaneous Deduction' is a few thousand dollars, I want to understand fully just what it might be, lest something crept in that shouldn't. I haven't paid Turbo Tax yet, so it is not allowing me to see the forms, which may provide additional clues. Thanks in advance for your feedback.
In general,Most closing costs are not tax-deductible. Generally, you may not deduct the costs related to taking a mortgage loan. Although you can add some settlement costs to the tax basis of your home, mortgage interest, points and state and local real estate taxes are usually the only closing costs you can deduct on your tax return. You must itemize deductions using Sch A.
Most deductions cover specific expenses you incur in certain situations, such as medical or mortgage interest expenses. You can include many expenses in miscellaneous deductions if there is no specific designation for its inclusion in a specific deduction, however.You can deduct certain expenses as miscellaneous itemized deductions on Sch A of 1040.You can claim the amount of expenses that is more than 2% of your AGI. You figure your deduction on Sch A by subtracting 2% of your AGI reported on 1040 line 38. from the total amount of these expenses. When you’re looking at your closing costs, those figures are going to be on your HUD settlement statement..



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Old 04-11-2014, 10:23 AM
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Thanks for the reply. A box for sales expenses, commissions, legal charges came up when I was reporting sale of the property (which had been used for rental, and hence the sale was reported in the rental area of my 2013 tax). TurboTax asked me to enter this amount, which I did, taken verbatim from the HUD form. There are no other issues I can see, such as mixed use, since it was not my main home (I live in a different state).

This is the most likely expense I can think of which would correlate with the 'miscellaneous' which TurboTax says I have. In the end, I may just have to finish the taxes and prior to filing, note whether TTax enlightens me on the form.



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Old 04-11-2014, 11:26 AM
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Followup note. I believe the deduction actually derives from "excess deductions" reported on a form K-1 relating to my parents' estates. The amounts that Turbotax generates are a good match for the "over two percent of AGI" , and they fluctuate slightly as I amend my income items (thus tweaking the AGI). That is my best explanation for now. Since this situation is a one-time deal, it explains why I have never had this happen before.



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Old 04-12-2014, 02:22 AM
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Originally Posted by TXDM View Post
Followup note. I believe the deduction actually derives from "excess deductions" reported on a form K-1 relating to my parents' estates. The amounts that Turbotax generates are a good match for the "over two percent of AGI" , and they fluctuate slightly as I amend my income items (thus tweaking the AGI). That is my best explanation for now. Since this situation is a one-time deal, it explains why I have never had this happen before.
Thanks for the reply. A box for sales expenses, commissions, legal charges came up when I was reporting sale of the property (which had been used for rental, and hence the sale was reported in the rental area of my 2013 tax). TurboTax asked me to enter this amount, which I did, taken verbatim from the HUD form. There are no other issues I can see, such as mixed use, since it was not my main home (I live in a different state).

This is the most likely expense I can think of which would correlate with the 'miscellaneous' which TurboTax says I have. In the end, I may just have to finish the taxes and prior to filing, note whether TTax enlightens me on the form.====>>>>>>>>>>>> I guess as you exclusively the TT software, whenever you have a tech issue, you need to contact the software vendor for accurate tech help. I am not familiar with TT software as I use Drake software for Tax pro.



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Followup note. I believe the deduction actually derives from "excess deductions" reported on a form K-1 relating to my parents' estates. The amounts that Turbotax generates are a good match for the "over two percent of AGI" , and they fluctuate slightly as I amend my income items (thus tweaking the AGI). That is my best explanation for now. Since this situation is a one-time deal, it explains why I have never had this happen before.====>>>>>>>>>OKI I got you



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