Closing Disclosure vs. HUD-1

[mbridges44]

Since virtually none of these closing costs are deductible (except for business property)

Maybe us with rental properties want to use Turbo Tax too...It would be great if this form can be updated so I don't have to waste 45 minutes shuffling through my closing documents looking for a HUD-1 that doesn't exist.

[DianeW777]

The HUD-1 was used for years on very home sale.  As of October 3, 2015, the Closing Disclosure form replaced the HUD-1 form for most real estate transactions. However, if you applied for a mortgage on or before October 3, 2015, you received a HUD-1.

For sales occurring after that date, you should look for the Closing Disclosure form.

Deductible Expenses:

• Mortgage Interest if not included in the Form 1098 total for the year.  This may occur if the mortgage was sold to a different lender after a purchase. (Buyer)
• Prorated portion of real estate taxes (both buyer and seller will have their portions in the year of sale/purchase)
• Points, if applicable

All other closing costs such as Title fees, real estate commissions, document recording fees, and legal fees, will be added to the purchase price of the residence for the buyer. 

@mbridges44

[member0012358]

It would be really helpful if you could cite the source for your interpretation of the Closing Cost Details vs. HUD-1 statement. If I make a mistake, I can't tell the IRS that I did it this way because Irene2805 said so. 🙂

[NCperson]

Regardless of the form that is referenced, here is the citation on what is part of the cost basis.  Basically, if it related to the mortgage, it is not part of cost basis, it is simply a persnal expense.  Look at fees and closing costs on  page 8. 

https://www.irs.gov/pub/irs-pdf/p523.pdf

You received a document when you closed on your home that reconciled all the ins and outs to determine how much cash you needed to close.  THAT is the document that supports what you spent you cash on. 

this is a government website that discusses the document. 

https://www.consumerfinance.gov/ask-cfpb/what-is-a-hud-1-settlement-statement-en-178/

https://www.consumerfinance.gov/policy-compliance/know-you-owe-mortgages/new-disclosures-streamline-...

[sedgwickk]

I am having the exact same problem. We closed on our 2nd home in September 2021. It was converted to a Rental Property in 2022. The new closing form is apparently the "ALTA Buyer's Settlement Statement" and the values are very different from the HUD-1, not to mention the fact that the lines are not numbered like the HUD-1 was. Why Turbotax hasn't updated it's online wizard after 8 years (to address the deprecated HUD-1 references) is beyond me.

[ECS80]

I'm curious, a few years later, how you came to solve this (ongoing) problem with hud-1 vs closing disclosures?

Thanks!!