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dy1112
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My closing got delayed from Dec 2016 to Jan 2017. What do I do about expenses related to home-buying in 2016?

I live in CT where a deposit is needed to go under contract. I put down 10K in 2016 for a house that ended up closing in 2017, at which point the 10K deposit counted towards the down payment.

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4 Replies

My closing got delayed from Dec 2016 to Jan 2017. What do I do about expenses related to home-buying in 2016?

It is unlikely you would have any deductible home buying expenses in 2016 prior to the expenses paid at closing in 2017.

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.


dy1112
New Member

My closing got delayed from Dec 2016 to Jan 2017. What do I do about expenses related to home-buying in 2016?

I should have added I live in CT where a deposit is needed to go under contract. I did have to put down 10K in 2016 for the house I closed in 2017. The deposit does eventually count towards down payment. Do I wait until next year to claim that 10K as a deductible expense, as part of the down payment?

My closing got delayed from Dec 2016 to Jan 2017. What do I do about expenses related to home-buying in 2016?

Neither a deposit or a down payment are a deductible expense on your tax return.
dy1112
New Member

My closing got delayed from Dec 2016 to Jan 2017. What do I do about expenses related to home-buying in 2016?

Good to know. Many thanks!
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