Sellers on Long Island often ask about tax perks from commissions. In 2026, rules stay clear but nuanced. Homeowners in Nassau or Suffolk pay agents for sales. These fees impact taxes indirectly. Jones Hollow Realty Group explains this for clients. We focus on Long Island’s high-value market near beaches and suburbs.
Understanding Commissions Basics
Agents earn commissions from sales. Sellers typically pay 5-6%. Buyers sometimes cover their side. For personal homes, commissions don’t deduct directly. They reduce the net sale price instead. This lowers capital gains tax. Investors get better breaks. Rental property owners deduct fees as business costs.
Tax Rules for Homeowners
The IRS views commissions as selling expenses. Home sellers subtract them from gains. No direct deduction on Schedule A applies. Itemized deductions cover property taxes, not agent fees. Long Island’s pricey homes mean big commissions. Smart planning cuts tax hits. Consult pros for accuracy.
As Brad Wilson, broker of Jones Hollow Realty Group, states: “Commissions aren’t a straight deduction, but they smartly offset gains in Long Island’s robust market. Know the rules to maximize your returns.”
Investor Advantages in 2026
Real estate investors deduct more. Commissions count as business expenses on Schedule E. This applies to flips or rentals. Estate tax exemptions rise to $15 million. Long Island syndicates benefit. Deduct legal fees too. Track everything carefully.
Visit the IRS site for details: https://www.irs.gov/publications/p530.
Common Pitfalls to Avoid
Don’t assume all fees deduct. Personal sales differ from investments. Refinancing points may qualify. Quarterly estimates prevent penalties. Long Island agents like us help document costs.
Get Expert Guidance
Taxes confuse many. Long Island’s coastal lifestyle adds unique factors. Plan ahead for sales.
Need help navigating real estate commissions and taxes? Reach out to our representatives at Jones Hollow Realty Group. We compliment your savvy—call today for tailored advice!