topic Purchase of home closing costs in Deductions & credits

Purchase of home closing costs

pbuys — Sat, 01 Jun 2019 04:42:46 GMT

We have deducted interest but is there anything in closing expenses such as broker compensation appraisal fee , transfer taxes etc?

I have listed out the closing costs that would be deducti...

LeeM — Sat, 01 Jun 2019 04:42:47 GMT

I have listed out the closing costs that would be deductible and the non-deductible ones below that:

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/transfer 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 (for calculating gain/loss when/if you sell your home).

In a case where the seller technically paid some portion...

Hollingsworth — Sat, 01 Jun 2019 04:42:48 GMT

In a case where the seller technically paid some portion of closing costs as part of the contract, which, if any, does the buyer of the home get to claim for tax purposes?

Home Ownership deductible There is not a first time home...

xmasbaby0 — Sat, 01 Jun 2019 04:42:50 GMT

Home Ownership
deductible
There is not a first time home buyers credit on a Federal return. That ended in 2010. If your state has such as credit, you will be able to enter it when you prepare your state return.
Buying a home is not a guarantee of a big refund.  Your deductions for homeownership combined with your other deductions (if any) must exceed your standard deduction to change your tax due or refund. If you purchased your home late in the year, you do not even have a full year of home ownership deductions.
Go to Federal> Deductions and Credits> Your Home to enter mortgage interest, property taxes, private mortgage insurance and loan origination fees (“points”) that you paid in 2016.  You should have a 1098 from your mortgage lender that shows this information.
Your closing costs on your new home are not deductible except for prepaid interest, prepaid property tax or loan origination fees.  There are no deductions for appraisal, inspections, title searches, settlement fees. etc.
Your down payment is not deductible.
Your homeowners insurance for fire, hazard, flood, etc. is not deductible for your own home.
Home improvements, repairs, maintenance, etc. for your own home are not deductible.
Homeowners Association  (HOA) fees for your own home are not deductible.