What all is included inn abstract and recording fees?

[MichaelDC · Accepted solution]

 Abstract – A title insurance professional must perform a title search and produce documentation on the home’s title. The abstract is a concise summary of that search and official documents related to the immovable property. ($100-$200 depending on the length and complexity of the abstract)

Government Recordation Charges – The recording fee is paid to a government body which enters an official record of the change of ownership. ($85 for the Cash Sale/Deed, $225 for a mortgage, and these charges will vary slightly from parish to parish)

According to the IRS:

"These are recorded on your Closing/Settlement statement (HUD). Many other settlement fees and closing costs for buying the property become additions to your basis in the property and part of your depreciation deduction, including:

• Abstract fees
• Charges for installing utility services
• Legal fees
• Recording fees
• Surveys
• Transfer taxes
• Title insurance
• Any amounts the seller owes that you agree to pay (such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions)."

Please feel free to post any additional details or questions in the comment section.

[Vil]

I have attached fees, can you tell me which one is "Abstract Fee", Legal fee, title search, document preparation, land survey, transfer or stamp taxes?

Thanks,

[ColeenD3]

That is not a HUD-1. There is no correlation between the items you asked about and what is on the form you sent.

Please see these links for more information.

Understanding HUD-1

HUD-1

[sjcox99]

All I had was a closing disclosure.   I called out mortgage company and she said as of 2017 they were not long using the HUD1 form.  My form looks exactly like the one posted above.

[JamesG1]

2017 was about when the form was changed.  The HUD-1 is a required disclosure form.  See this: 

'According to the RESPA act, the HUD form is to be used by all lenders of loans providing funds for real estate purchases and refinances of real estate loans and must be given to the borrow at least one day prior to the date of settlement.'

Hopefully, you received something that reflected the actual (and not proposed) costs of the sale/purchase of the property.

[Vil]

Attached is Closing disclosures. In addition to this I received ALTA Combined Settlement Statement which looks like this one here - https://files.consumerfinance.gov/f/201311_cfpb_kbyo_closing-disclosure.pdf

Do you have any recommendations how can I find what is abstract and fees. I was able to locate recording fees.

[JohnB5677]

Property documents including deeds, mortgages, litigations, tax sales and so on are included in the Abstract.  It also includes a list of all the  people that owned the property, and when they owned it.

Recording Fees are for the filing of the Deed and your mortgage within your County.

[codeman2727]

From my research it looks like the HUD-1 is no longer required.

Recently, the Consumer Financial Protection Bureau stated that the current 3-page HUD-1 Settlement Statement is “replete with…technical and legal jargon… that may be more confusing than helpful.  Complicated and lengthy disclosures can make it hard to answer or even ask the right questions.”

Because of what the CFPB believes, they have decided to do away with the HUD-1 settlement forms including the Good Faith Estimate and the Truth-in-Lending disclosure and replace them with forms entitled “Loan Estimate” and “Settlement Disclosure Form” also known as “Closing Disclosure form”.  This change was effective October 3rd, 2015.  The National Association of Realtors (NAR) is hosting a series of webinars on the topic.  To learn when the next one is, go to Realtor.org/respa.  Below are examples of the new forms:

[gnugen]

@lilacs After 8 responses, 3 of which were from "Experts", it seems to me that your questions wasn't really answered. I have the same question as you because my Closing Disclosure does not explicitly identify "Abstract" fees. If these are in fact the $100-200 Title Search fees, as mentioned above, then why does my Closing Disclosure devote a line for "Title - Search and Exam" not "Abstract" (which in my case was $17.50), and why does Turbo Tax have an entry box for "Legal Fees, Title Search, Document Preparation"? There must be a correct answer to this question since Turbo Tax devotes an entry box for this topic. Can someone please elaborate on an accurate answer?

[DMarkM1]

As JohnB5677 mentions above the Abstract is a bundle of documents that would include a title search.  Many times an "Abstract" is not part of the closing so the other items would be individually listed.  That is why you see the lines separated in TurboTax.  

[gnugen]

@DMarkM1 

First, thank you for the reply as I do believe you and others are trying to help. However, I’m still not satisfied that the original question is being answered appropriately. So, let me ask the question in a different way.

My version of TurboTax requests that dollar values are entered into two consecutive entry boxes for "Abstract and Recording Fees” (let’s call these A and B, which go in box 1) and "Legal Fees, Title Search, Document Preparation” (let’s call these C, D, and E that go in box 2)

If the Abstract (A), as stated by you and others, does in fact include the Title Search (D), then why am I asked to provide a cost for the Title Search twice (A in box 1, and part of A, or D, in box 2)? Remember that you keep saying the Title Search (D) is actually part of the Abstract (A). This does not make sense to me, and seems like “double-dipping”. Please explain. 🙂

[DMarkM1]

I understand.  Title companies in different states and even counties have different billing methods and even the property involved could be a factor.  There may not be an abstract and the closing may not require an abstract. 

In any case you only enter an item once in TurboTax.  Some closings include an abstract which has many of the fees in box two included.  In that case you only need to enter the abstract and recording in box 1. 

Some closings do not include an abstract and the items will be broken out and you would put them in box 2. 

Some closings have a combination; there may be an abstract and/or recording fee plus some of the other items listed in box 2. You would separate into appropriate box 1 or 2.  

[alejandra7369]

I am confused, what is exaclty abstract? anything related to the title?

[bhwilkins]

Has anyone figured out how to map the fields as posted above on ‎February 6, 2020 8:16 PM to the fields TurboTax requires? Do all of the numbers in section C belong on the tax form?