Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
mehtutk
New Member

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 ?

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 ?
1 Best answer

Accepted Solutions
xmasbaby0
Level 15

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 ?

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.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

View solution in original post

3 Replies
xmasbaby0
Level 15

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 ?

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.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Carl
Level 15

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 ?

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
Level 9

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 ?

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.
Dynamic AdsDynamic Ads
Privacy Settings
v