Hello!
When purchasing a home, you are able to deduct many expenses.
The following can be eligible for a tax deduction:
- Your property taxes. Don’t forget to include any taxes you may have reimbursed the seller for. These are taxes the seller had already paid before you took ownership. You won't get a 1098 report listing these taxes. Instead, that amount will be shown on the settlement sheet. Beginning in 2018, state and local taxes, including property taxes, are limited to $10,000 per year.
- The mortgage interest on your primary residence, as well as on a second residence. (There are limits, but relatively few taxpayers are affected.)
- The interest on up to $100,000 borrowed on a home equity loan or home equity line of credit, regardless of the reason for the loan (for tax years prior to 2018 only).
- Points that you paid when you purchased the house (or those that you convinced the seller to pay for you).
- Home improvements required for medical care.
Regarding your second question, expenses that might get overlooked are the sale expenses.
Sales expenses include:
- commissions
- appraisal fees
- broker's fees
- legal fees
- advertising fees
- home inspection reports
- title insurance
- transfer taxes or fees
- geological surveys
- loan charges (points) or other fees paid on the buyer's behalf
Sales expenses do not include:
- mortgage payoffs
- home equity loan payoffs
- rent-back costs
- payoff to creditors
- property taxes
- home owner association fees
Hopefully this answers your question!
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