A buyer and seller in Portage County, Ohio (which charges the county permissive fee) are closing on a $275,000 home. The seller asks the closing agent if the conveyance fee is tax-deductible. The agent correctly states:
Correct Answer
D) The conveyance fee paid by the seller reduces their amount realized on the sale, while the buyer may add it to their cost basis if they pay it
For federal tax purposes, the conveyance fee paid by the seller reduces their amount realized (net proceeds) from the sale, which may reduce capital gains. If the buyer pays or shares the fee, the buyer may add that amount to their cost basis in the property. This is standard IRS treatment of transfer taxes.
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