I refinanced my property & got lender credit that covered all of the closing cost expenses. Can I still deduct any of the closing costs expenses in my taxes?

[DoninGA · Accepted solution]

Basically the only closing costs that are deductible on a home purchase are Mortgage Interest and Real Estate or Property taxes that were paid.  The other closing costs are added to the basis of the home when it is sold.

See answer here - https://ttlc.intuit.com/questions/2396537-what-closing-costs-are-tax-deductible-on-a-primary-residen...

[sbeilstein]

I don't think this answers question as this is regarding a lending credit.  Do you have to account for the lending credit in the closing costs?  Say the total closing costs on a refinance are $4000, but the lender gives you a credit of $3500 to help cover the costs.  Can you ammortize the full $4000 or only the $500 difference.

[DoninGA]

The eligible closing costs are added to the basis of the home, regardless of who paid the costs.

[sbeilstein]

Thank you, is a lending credit an eligible cost even though it's a credit?

[DoninGA]

The lender credit paid for some of the closing costs so those eligible closing costs which were paid would be added to the basis of your home when it is sold.

[nybagga]

You can either deduct the closing cost expenses (made by you) or you can deduct the costs associated with the borrowed money which covered the closing costs. Not both.