Did you (and/or your spouse) purchase this home? If so, your initial cost basis is the purchase price of your home plus any applicable closing costs you paid for. If your spouse is deceased, remember to adjust your cost basis higher (i.e., a partial step-up or full step-up in basis depending on whether you live in a common law or community property state). Did you inherit your home from someone other than your spouse? If so, your initial cost basis is generally what the fair market value of the property was at the date of death from the person you inherited it from, or the alternative valuation date if elected. See the "Will I Receive A Step-Up In Basis For The Appreciated Property I Inherited?" flowchart. Did you receive your home as a gift or as part of a divorce settlement? If so, your initial cost basis is generally carried over from the person you received the home from (i.e., their cost basis). Be mindful of whether the “double basis” rules apply to your situation. Have you made any capital improvements to your home (e.g., remodeling, solar panel installation, etc.)? If so, remember to adjust your cost basis higher by the amounts you’ve paid for cap- ital improvements. However, be mindful to adjust your cost basis lower by the amount of any energy tax credits you may have received for energy-related home upgrades. (continue on next page) Do you need to review what you’re going to do with your home sale proceeds? If so, consider the net amount you will walk away with, and make sure to plan appropriately for any transition period (e.g., job change, temporary income shortage, etc.) or upcoming expenses (e.g., new down payment, moving costs, etc.) you may be subject to after the sale. Do you need to review whether you are organized and prepared for your home sale? If so, consider what documents you need to get in order (e.g., deed, title, tax bills, utility bills, rental agreements, etc.), what professionals may need to be involved (e.g., real estate agent, attorney, appraiser, inspector, etc.), and whether any updating or staging may be necessary. Did your home inspection identify any issues that need to be addressed? If so, consider resolving any issues/repairs before putting your home on the market, and have a plan to address any outstanding issues with prospective buyers. Are you considering making home improvements to increase the sale value (or competitiveness) of your home? If so, consider whether the potential value added from improvements will outweigh the costs, and be mindful that buyers may not share the same style preferences as you. In some circumstances, reduc- ing your home’s listing price may be more competitive than making costly improvements. Are you considering selling your home without a real estate agent (i.e., for sale by owner)? If so, consider whether the poten- tial benefits (e.g., saving on commissions, control over the process, etc.) outweigh the risks (e.g., longer sale process, potentially lower sale price, etc.) before making a decision. Do you currently have rental tenants living in your home? If so, consider how their current lease agreement (e.g., month-to-month, fixed-term, etc.) might affect the sale process, and be sure to give your tenants plenty of notice. Depending on your circumstances, you may need to negotiate an early move-out with your tenants by offering a payout. Do you need to review what to do after the sale of your home? If so, consider contacting your mortgage lender and escrow company for formal verification that your remaining mortgage balance was paid off (if applicable), and your homeowners insurance provider to make sure you update your policy (e.g., cancel, transfer to new property, etc.). (continue on next column) SALE ISSUES YES NO SALE ISSUES (CONTINUED) YES NO COST BASIS ISSUES YES NO
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