Can I claim a down payment for home purchase?
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tobyanks104
New Member

Can I claim a down payment for home purchase?

 
5 Replies
IreneS
Intuit Alumni

Can I claim a down payment for home purchase?

No, the down payment for a home purchase is not deductible.  However, other items relating to your home are deductible--for example, mortgage interest, property taxes, private mortgage insurance and loan origination fees (points) you paid in 2016.

To enter these items, please follow these steps:

  1. Click on Federal Taxes > Deductions & Credits  [In TT Self-Employed:  Personal > Deductions & Credits > I'll choose what I work on].
  2. In the Your Home section, start by clicking on the Start/Revisit box next to Mortgage Interest, Refinancing, and Insurance.  [See Screenshot #1 below.]
  3. TurboTax will ask you the details about the mortgage interest interest, mortgage insurance premiums, and points you paid when you took out the loan.
  4. After entering the mortgage information, you will see the Mortgage deduction summary screen.  If you only have the one mortgage to enter, click Done.  If you have another mortgage to enter, click the box Add a lender.  [Screenshot #2]
  5. You will be brought back to the Deductions & Credits screen.  In the Your Home section, click on Start/Revisit next to Property Taxes.
  6. Continue through the screens, entering the requested information.



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Mirobbins
New Member

Can I claim a down payment for home purchase?

I signed a contract to purchase a home in November 2019.  The down payment was $5000.   I February 2020 we had to back out of the contract and lost the $5000.   The home builder kept the $5000.  Is the lose tax deductible?   

CatinaT1
Employee Tax Expert

Can I claim a down payment for home purchase?

No.  This is not something that is deductible.

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Mirobbins
New Member

Can I claim a down payment for home purchase?

If the home purchase was a business investment can the $5000 down payment then be considered tax deductible? 

ToddL99
Employee Tax Expert

Can I claim a down payment for home purchase?

If you were purchasing the property as an investment, a forfeited deposit can be deducted.

 

It would be treated as an investment expense and you would have to itemize deductions in order to claim it as such.

 

See "Other Investment Expenses" interview in  Personal Income > Deductions and Credits > Retirement and Investments.

 

(IRS Publication 530 specifically notes that "forfeited deposits" aren't tax-deductible on your tax return, but that refers to the purchase of a personal residence).

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