If the buyer includes the closing cost on a mortgage, would the seller have to include that amount on their capital gains or would that be tax deductible because it is for closing cost? Please provide your source of information!
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ANSWERS: 1
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It doesn't matter what the buyer put into the mortgage, just the payment the seller receives. You aren't expected to have to cover PMI (private mortgage insurance) if the buyer doesn't put down 20% and then rolls the PMI into the mortgage. You're also not expected to pay for their origination fees, points, etc. that factor into their mortgage. Now, if you had a Realtor, you'd be expected to pay them a percentage of the sale price, but you could reduce that from the capital gains.
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