turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

crgbtk
New Member

Can closing costs on a second (vacation) home be claimed

 
1 Reply
IreneS
Intuit Alumni

Can closing costs on a second (vacation) home be claimed

You didn't say whether you were buying or selling the home. 


Buying

Most of the closing costs on a home purchase are not deductible.  Instead, they are added to the cost (basis) of the home to reduce any gain when you sell the house down the road.

Other examples of closing costs added to the basis of the house are:  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.

 

Some closing costs that are deductible include:

  • 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 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 attributable to this year based on an 84 month amortization.
 

Selling

As with buying the home,most of the closing costs on a home sale are not deductible.  Instead, they are subtracted from the sales price of the home to reduce any gain.

Deductible expenses are the same as when you are buying a home.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Manage cookies