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New Member
posted May 31, 2019 11:50:03 PM

Where do i enter deductions for new home purchase such as prepaid interest and prepaid property taxes?

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1 Replies
Level 7
May 31, 2019 11:50:05 PM

Prepaid mortgage interest and property tax held in escrow is not deductible. 

Only pro-rated amounts for interest and property taxes (based on a daily amount from your closing date until your first payment) are deductible.

Otherwise, 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- (See Did you pay points in 2016 when you took out the loan?) page

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

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.

  1. Attorney fees in connection with obtaining property
  2. Commissions
  3. State stamp taxes and transfer taxes
  4. Tax service fees
  5. Title policy fees or title insurance
  6. Miscellaneous abstracts of title, surveys, recording of deed
  7. Appraisal Fee