I was told I could deduct my down payment on my new home and got a credit for buying new ,is it true and how do I do it if so ?

[Texas Roger · Accepted solution]

There is no federal tax return credit for buying any type of home. You also cannot deduct the down payment on a home. It's possible some states may have certain credits.

Most expenses at closing on the purchase or refinance of a home are added to the cost of a home and are not deductible but are added to the cost basis of the home.  There are a few exceptions - the following would be deductible:

1. Interest paid at the time of purchase (the charge at closing would normally be done for interest up to the date of first payment.) This is sometimes included in the 1098 from the new lender.

2. Real estate taxes charged to you and not reimbursed by seller

3. Points or origination fees.  On a refinance they need to be amortized over the life of the loan unless the points were used to improve your main home.

4. Private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization.

Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, attorney fees, etc. are not deductible, but are added to the cost of the property.

[sunflower44]

thanks thats what I thought but wanted to make sure...