You may have a casualty loss in 2015 for the fair market value of the house at the time of fire.
Reconstruction costs are treated the same as any home purchase. Most
expenses at closing on the purchase or refinance of a home, second home,
vacation home, timeshare, etc. are not deducted but added to the cost of a new
home. There are a few exceptions - the following would be deductible:
- interest
paid at the time of purchase (the charge at closing would normally be done
for interest up to the date of first payment.),
- real
estate taxes charged to you,
- points
(sometimes called origination fees and expressed as a percentage of the
amount borrowed.) On a refinance
they need to be amortized over the life of the loan or 84 months,
whichever is less, unless the points were used to improve your main home,
and
- 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, appraisal costs, home inspections, documentary
stamps, credit report costs, costs of an abstract, escrow fees, transfer taxes,
flood certificate, attorney fees, etc. are not deductible, but are added to the
cost of the property.
