For your primary or secondary home, the only deductible closing costs are home mortgage interest and certain real estate taxes. These deductible costs generally include:
- Real estate taxes paid at closing
- Mortgage interest paid when the cost was settled
- Interest paid at the house’s purchase
- Loan origination fees, known as “points”
Note: Other costs are deductible when refinancing your rental property.
You can add other settlement fees or closing costs to the basis of your property. This way you’ll get credit for those costs when you sell the home. These base adjustments include:
- Abstract fees
- Charges for installing utility services
- Legal fees
- Recording fees
- Surveys
- Transfer taxes
- Title insurance
- Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions
Current Rental Properties entry section
Did you sell Rental Property? If so, here is how to report it and recapture the depreciation.
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