I sold my primary home and need to report capital gain on the sale.
In the settlement statement there are a loan origination fee and a lender credit that I am not sure how to report.
The loan origination fee in my case is lender service fees (application fee and underwriting fee). Per instructions for Schedule A, it is not deductible as interest.
The lender credit is a credit the lender offered to me to offset the loan origination fee and other fees in the loan application process.
Per Pub 523, selling your home, charges connected with getting a mortgage loan can’t be included in the Cost Basis. Both the loan origination fee and the lender credit in my case seems fill in this category, one is a positive number and the other is a negative number, in the almost same amount.
My question is how to report them. Can they both not be included in the Cost Basis? Can they both be included in the Cost Basis or only one can? If only the lender credit can be included in the Cost Basis, it seems it is not fair to me.
Thank you for your reply.
