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Classification of Home built and purchased prior to selling of Main residence

Hi; 

 

We had a new home built in a different state than our main home.  We closed on the new home prior to the end of the year but did not sell our existing home until end of December.  Is it worth attempting to utilize any deductions for the new home in 2023 or?  Property taxes and mortgage interest on the new home for example? 

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3 Replies
KrisD15
Employee Tax Expert

Classification of Home built and purchased prior to selling of Main residence

Yes, IF YOU ITEMIZE deductions, rather than take the Standard Deduction. 

 

If you paid points on the financing of the new home, the points would be included as interest. 

 

Enter the items, such as property tax and interest, and the program will report which is more advantageous, Itemizing or taking the Standard Deduction. 

 

HERE is a link about Itemizing or taking the Standard Deduction 

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Classification of Home built and purchased prior to selling of Main residence

Thank you.  Is the new home a 'second home' for 2023?  Main home now but for the month of December 2023 must it be defined as a second home or?

KrisD15
Employee Tax Expert

Classification of Home built and purchased prior to selling of Main residence

It is (and was)  your main home for tax purposes. If you paid points, the total points would be deductible since it is your main home. If a second home, the points would be treated a bit differently and spread over the life of the loan. 

 

Second home is more a vacation house.

 

Since you sold a home in 2023, and you might get the Exclusion from Capital Gains from that sale, so you would refer to the home sold as your main home as well.  Technically, they were each your main home for each part of the year. 

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