What closing costs (and bank fees) are tax deductible when you sell and when you buy a home and get a mortgage

[laoying1]

For a SELLER, I am looking at:

Property Taxes paid by seller from 1st of year to closing date

Commissions to realtors

Title charges such as Lender's Coverage, Owners Title Insurance, Settlement or closing fee, E-Recording Service Fee, Reconveyance Tracking Fee, Express delivery service fee

Government Charges such as Road Maintenance Agreement

For a BUYER, I am looking at:

Property Taxes paid by buyer (rare)

Commissions to realtors (usually by seller)

Bank charges: Doc Fee to law firm

                          Points (Origination Fees)

                          Escrow payments

Closing costs: such as Closing Fee, Closing Protection Letter Fee, Doc Prep Fee, Endorsements to Title agency, Lender's Title Insurance to Title Company, Loan Tie-in Fee, Recording Service Fee, Signing fee paid by buyer

Government Charges: Recording Fees to Title Agency

Homeowner's Insurance Premium

[DMarkM1]

For your personal residence the deductible items are any Mortgage interest paid during the year and any real estate taxes paid during the year.  The other items are not deductions, but may be used to decrease your gain on the sale of the home when you sell it.  

Items like the below are added to the cost/basis:  

• Abstract fees (abstract of title fees),
• Charges for installing utility services,
• Legal fees (including fees for the title search and preparing the sales contract and deed),  
• Recording fees,
• Survey fees,
• Transfer or stamp taxes, and
• Owner's title insurance.

So for the sale of your home if you received a form 1099-S you must report that on your tax return.  If you lived in the home for at least 2 of the last 5 years before the sale you may be able to exclude up to $250,000 of gain (500,000) if owned jointly with spouse.  Part of the interview in TurboTax will ask you about the expenses with the sale which also reduces the gain. 

For the home you bought, keep track of those closing costs to use when/if you sell that home.

The other closing cost items like the below are not part of basis.   

• Fire insurance premiums,
• Charges connected with getting a mortgage loan, such as:

1.  Mortgage insurance premiums (including funding fees connected with loans guaranteed by the Department of Veterans Affairs),
2.  Loan assumption fees,
3.  Cost of a credit report,
4.  Fee for an appraisal required by a lender, and

• Fees for refinancing a mortgage.

Here is a link with more information on selling your home.