I took out a loan for an investment property that
closed on 12/31/2020
. Ididn't take possession of the home until 1/4/21
. I incurred a number of up front closing costs, but I can't figure out where I enter these in TT, since I had no income on the property itself (because I didn't take possession of it until 2021). On top of the closing costs, I also paid for an inspection. Where do I enter these costs so I get the deduction (or automatically carry over the deductions for next year)?
Below, please find a photo of my closing costs document. There are so many different fees on here, including two different line items for home insurance and property taxes, which I also don't understand. I also received a 1098 for the $21.18 listed as "prepaid interest" - do I have to enter that somewhere on my TY2020 taxes?
If someone could provide me some advice, I'd be so grateful.
Generally, deductible closing costs are those for interest, certain mortgage points and deductible real estate taxes.
Many other settlement fees and closing costs for buying the property become additions to your basis in the property and part of your depreciation deduction, including:
[Source: IRS FAQs Rental Expenses]
For more information, please see: