The following loan costs are generally deductible.
I have a question - maybe you can help. I completed a loan modification in May 2019 with my current lender to get a better interest rate (4.25% to 3.5%) and to shorten the term of the loan (30 Yr Fixed to 15 Year Fixed). I paid a "modification fee" of 1% on the new principal balance. Is this tax deductible? Thank you.
Yes, the "modification" fee is prepaid interest on your mortgage and is deductible as interest paid on your mortgage. You will have to itemized your expenses to claim the deduction. If you take the standard deduction you will not be able to deduct the interest on your mortgage.
The standard deductions for 2019 are.
Thank you for your response. I assume this fee needs to be deducted over the term of the loan (15 years) and not taken in a lump sum in 2019, correct? Do you know which IRS publication I can refer to for guidance? I really appreciate your help!