You can’t completely deduct all the costs of closing on your house. Only a few eligible ones make the cut. The IRS denotes the following as deductible costs:
- Sales tax issued at closing
- Real estate taxes charged to you when you closed
- Mortgage interest paid when cost was settled
- Real estate taxes that were paid for by the mortgage lender
- The interest you paid at the house’s purchase
- Loan origination fees (a.k.a. “points”). These would be written as a percentage of the borrowed money.
Additional closing costs that are not deductible include
- Tax stamps,
- Attorney fees,
- Title insurance,
- Title search and
- Document preparation fees.
- None of these closing costs are deductible on your federal income tax return.
However, those costs can be included in your cost basis when selling your home.
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