The statement by xmasbaby0 "Your closing costs on your new home are not deductible except for prepaid interest, prepaid property tax or loan origination fees. There are no deductions for appraisal, inspections, title searches, settlement fees. etc." needs clarification. Although the costs associated with buying the home (appraisal, inspections, title searches, settlement fees. etc.) are not separate deductions, they are included in the basis of the home and are therefore included in the costs to 'buy, build or substantially improve the home'. If these costs are rolled into the original mortgage, they contribute to the acquisition debt of the mortgage.
