Purchased a new home in New York (Suffolk County). We paid a standard mortgage recording tax, PMI, closing costs and legal fees, title, appraisal, etc. What can I deduct?

[Texas Roger · Accepted solution]

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.

NOTE: The private mortgage insurance deduction expired and was not extended for 2018.

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.