Most
expenses at closing on the purchase or refinance of a home, second home,
vacation home, timeshare, etc. are not deducted but added to the cost of a new
home. There are a few exceptions - the following would be deductible:
- interest
paid at the time of purchase (the charge at closing would normally be done
for interest up to the date of first payment.),
- real
estate taxes charged to you,
- points
(sometimes called origination fees and expressed as a percentage of the
amount borrowed.) On a refinance
they need to be amortized over the life of the loan or 84 months,
whichever is less, unless the points were used to improve your main home,
and
- private
mortgage insurance costs but, if prepaid, only the amount allocable to
this year based on an 84 month amortization.
Title
fees, real estate commissions, appraisal costs, home inspections, documentary
stamps, credit report costs, costs of an abstract, transfer taxes, flood
certificate, attorney fees, etc. are not deductible, but are added to the cost
of the property.
Mortgage interest, refinancing, property taxes and
mortgage insurance are all under the Deductions and Credits tab for "Your
Home."
(As there is no consistency in how closing
agents prepare a HUD-1, it would be impossible to say with certainty
which lines those appear on.)
