Origination charges not shown on 1098, so I’m referring to my Closing Disclosure. Some articles/posts use the terminology “Origination Fees” or “Origination Charges”. Turbo Tax asks for “Origination Charges”. Under my Closing Disclosure, “Origination Charges” include Condo Review fee, Extended Lock fee, Loan Administration fee, Loan Origination fee, non-refundable application fee and Processing fee. Can I deduct this $##,### “Origination Charges” number or is it just the $#,### “Loan Origination fee” number? I’m confused with which one to input in Turbo Tax.
You can deduct just the Loan Origination Fee (also called points). If it's your primary residence you can deduct the full amount, but if you refinanced, then you will deduct the fee over the term of the loan or the life of the loan (just the origination fees, not the total closing costs). For example, if you refinanced to a 15-year mortgage, then you'd deduct a portion of the origination fees or points each year for 15 years.
The closing costs are not deductible,
they just add to your basis (cost of residence) and can be used later to offset
any gains you have from the sale of your house.
To enter the loan origination fees (“points”) in TurboTax, please follow the steps: