Tax Year Prior to 2020: Buying & selling 2nd home

[imaroadrunner]

Sorry I didn't say, some of the fees/costs were for just the 1 month.

[MaryK4]

Here is a list of your fees:

YES=Irrigation, courier fee, title endorsement fee, wire transfer fee, & title insurance transaction fee. 

NO=HOA, mortgage interest, Homeowner ins, closing fee

Closing letter = yes, if you mean preparation of said letter

@imaroadrunner

[imaroadrunner]

I can't claim the closing fee?

[MaryK4]

The closing costs are used for specifics items so you must classify each item to determine if it is added to basis.  For example, closing costs can be used to pay interest, taxes, abstract costs etc. so you cannot say Yes or No to Closing Costs categorically. 

@imaroadrunner

[imaroadrunner]

Its listed as closing fee, closing protection letter, courier fee, notary fee, title endorsement fee, & wire transfer fee.

[MaryK4]

Because it is a "closing fee"  it is most likely an administrative fee for preparing the docs so it would be added to basis. 

@imaroadrunner

[imaroadrunner]

So I can add those fees to the purchase price of the house, which will reduce the amount of taxable profit on the sale?

[HelenC12]

@imaroadrunner

Yes, you can. Closing costs, including the below are not tax deductible but may increase the cost basis of your home which may benefit you in the event of sale.

• Attorney fees in connection with obtaining property

• Commissions

• State stamp taxes and transfer taxes

• Tax service fees

• Title policy fees or title insurance

• Miscellaneous abstracts of title, surveys, recording of deed

• Appraisal Fee

However, you can deduct the following:

For a new loan or refinance, mortgage interest paid (including origination fee or "points"), real estate taxes, and private mortgage insurance (subject to limits) are deductible.

 Enter the above expenses in the following areas:

1.   Mortgage interest paid: Federal Taxes>Deductions &Credits> Your Home, select Mortgage Interest, Refinancing, and Insurance

2.   Points (or Loan Origination Fee): Federal Taxes>Deductions &Credits> Your Home, select Mortgage Interest and Refinancing, and Insurance- (

3.   Real Estate Taxes: Federal Taxes>Deductions &Credits> Your Home>Property Taxes

4.   Mortgage Insurance: Federal Taxes>Deductions &Credits> Your Home> Mortgage Interest, Refinancing, and Insurance

Some of the above expenses may be on your HUD-1 settlement statement.

Source: Marketstar