The purchase agreement of our new home is signed in July. Escrow will be closed in Jan 18. Which Date can be used as "purchase" date for mortgage interest deductions ?

[mehtutk]

I am trying to figure out tax implications of our home purchase with new tax reform. Home "purchased" before 15th dec can be grandfathered for 1M limit. Can we qualify for it ? or the "purchase" date is actually the date when Escrow is closed ?

[xmasbaby0 · Accepted solution]

You have not purchased that home until you close the sale.  If the sale is closing in 2018, then you will be subject to the tax law in effect for 2018.

[Carl]

Basically, you have nothing to report on your 2017 tax return, because you do not own a home yet, and you won't until you close in 2018.
Also, contrary to what folks may think, your mortgage interest *IS* deductible in 2018. Read the bill.
<a rel="nofollow" target="_blank" href="http://apps.washingtonpost.com/g/documents/business/read-the-full-gop-tax-bill/2678/">http://apps.wa...>

[TaxGuyBill]

The exception to what xmaxbaby said is if you have a "binding contract" written before December 15th (the purchase agreement may qualify) that specifically says the closing will be before January 1st.

In the event it says that, you have until April 1st ACTUALLY close on the house, and still qualify for the $1,000,000 limit.