Today TaxMama hears from Anita in Florida, who says. “I recently sold a rental property. The buyers used a down payment assistance program called Ameridream®. The literature I received from Ameridream® says the fee that I paid as part of closing costs ‘may be able to be deducted as a selling expense’. I can’t find any information on the IRS website. What do you think?”
Wow. What an interesting resource!
I’ve never heard of Ameridream®. Yet, here they are, providing monetary gifts of down payment funds – and legislative advocacy to help Americans buy homes.
You won’t find Ameridream® specifically mentioned in the Tax Code.
But, they are correct. Any fees you pay in the course of selling your home become part of your selling costs. So, add these costs to the basis (tax cost) of your home, when you compute your taxable gain.
And thanks for pointing out this resource. It’s definitely worth exploring for both buyers and sellers. For sellers, you can increase your chances of selling your home – even if it’s not clear how much the fee is. It’s disappointing that they don’t disclose that. But, since they do use part of the fee to replenish the fund, that’s worth noting. http://www.ameridream.org/Programs/DPA/Sellers/HowItWorks
For buyers, not only do they provide a down payment, they have a program to cover a member’s mortgage for up to 4 months (up to $2,000 per month) in the event of certain problems.
And remember, you can find answers to all kinds of questions about the American Dream and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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- Ameridream – DPA :: Down Payment Assistance program – you don’t repay
- Ameridream – Sellers :: Sign up your home to help buyers raise the down payment
- Ameridream – Dreamkeeper :: Mortgage protection program, pays your mortgage for 4 months