Q. We sold our home in 2009 and need to know what form we use to file for expenses of realtors commision and closing costs .

A. If you decide to sell your home, you’ll be able to reduce your taxable capital gain by the amount of your selling costs. (You may not have to worry about your gain at all if it’s low enough to fall within the exclusion described below, but if your profits from the sale look higher then the exclusion, take a closer look at this section.)

Real estate broker’s commissions, title insurance, legal fees, advertising costs, administrative costs, and inspection fees are all considered selling costs. In addition, the IRS recognizes that costs ordinarily attributed to decorating or repairs — painting, wallpapering, planting flowers, maintenance, and the like — are also selling costs if you complete them within 90 days of your sale and with the intention of making the home more saleable.

All selling costs are deducted from your gain. Your gain is your home’s selling price, minus deductible closing costs, selling costs, and your tax basis in the property. (Your basis is the original purchase price, plus the cost of capital improvements, minus any depreciation.)

You’ll find basic information for first-time homeowners (IRS Publication 530) and publications about selling your house (IRS Publication 523).

http://www.irs.gov/pub/irs-pdf/p523.pdf