Built a new home in 2022 with a construction loan. Jan 2023 construction loan converted to a standard mortgage loan. This is my primary residence that I now live in. I live in wa. state. What cost can i claim on my 2022 taxes?
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Hello jones135,
Congratulations for owning a new home!
Building a new home can require a long list of expenses, including your down payment, permits, insurance, and construction costs. Unfortunately, most of these expenses that pertain to building a new home are not deductible on your taxes.
These expenses are your Cost Basis for the home, so when you sell it, you will subtract the cost basis to determine your profit or loss.
So now that it is your personal residence starting January 2023, you may be able to deduct your mortgage interest, property taxes, if you paid any points on the mortgage loan, Home Equity Loan interest, Mortgage Insurance, etc., on your 2023 taxes.
Please let us know if you have any additional questions.
Congratulations again!
When itemizing, you can deduct your state income taxes paid (add up boxes 17 and 19 of your w2's, estimated tax payments made in 2022), or a standard sales tax rateplus any state and local tax for major purchases such as motor vehicles, aircraft, boats, homes and materials to build a home. The greater of the two will go on line 5a. There is a limitation on the taxes you paid section of $10K (Schedule A, line 7). This is advice for 2022 tax return per above.
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Hello!
Congratulations on the construction of your new home!
You can deduct the interest on your construction loan if the loan was secured by the property you moved into which is your case!
You can treat a home under construction as a qualified home for a period of 24 months , but only if it becomes your primary home a the time it is ready for occupancye. The 24 month period can start any time on or after the date that construction begins.
Mary, tax expert
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