Can I deduct my closing cost, or any part of them, for buying a home this year? It is my first home purchase.

  • What specifically are you asking?
  • Can I deduct my closing cost or part for being a first time home buyer.
    Can I deduct the cost of my Certification test.
  • There are no additional closing costs that can be deducted for first time home buyers. See the answer below for what can be deducted.
  • I know I can deduct certain lines from the HUD statement (106; 107; 801; 802; 1003 & 1004).  Where are these entered?
  • Click on Federal Taxes, Deductions and Credits, Explore on My Own. Look under Your Home.
  • I have the premier version and I cannot seem to locate where to enter these deductions when I follow your advice.  Can you plese assist?
  • Federal Taxes is in the column on the left of the screen. After clicking on it, you should see a choice among Wages and Income, Deductions and Credits, and some other categories. Click on Deductions and Credits. You may or may not see Explore on My Own. If you do, click on it. The next screen will have all the Deductions and Credits categories. Your Home is at the top.

    If that doesn't work, try this. Click on Tools then Topic Search. Type mortgage interest in the search box and click on the same words in the drop down box and click Go.
  • Can I deduct closing cost from home purchase?
  • See answer below.
Most expenses at closing on the purchase or refinance of a home are added to the cost of a new home.  There are a few exceptions - the following would be deductible:
interest paid at the time of purchase (the charge at closing would normally be done for interest up to the date of first payment.),
real estate taxes charged to you, and
points.  On a refinance they need to be amortized over the life of the loan unless the points were used to improve your main home.
private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization.
Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, attorney fees, etc. are not deductible, but are added to the cost of the property.

  • We paid cash for the closing fees, which included the needed appraisals, inspections, credit report fees, flood certification fee, 1 year PMI in advance, 1 year property insurance in advance, and government recording and transfer fees. Can I use any of this for deductions?
  • The PMI can be deducted if you qualify for a PMI deduction. Nothing else can be deducted.
  • How do you know if you qualify for a PMI deduction?
  • The PMI deduction is phased out by 10% for each $1,000 by which your adjusted gross income (AGI) is over $100,000. That means that you can’t use the deduction if your AGI exceeds $110,000.
  • Ok, Thank you for all of your help!....... is the above mentioned AGI for a single income or the limit for married?
  • Married filing jointly.
  • How do I list interest paid at the time of purchase?  I paid interest up to the first date of the mortgage payment (like you mentioned).  I just don't know how to enter it in TurboTax.   Thanks.
  • Click on Federal Taxes, Deductions and Credits, Explore on My Own. Click on Start or Update after Mortgage Interest. Click on Add a Lender and check the box beside I did not receive a 1098. The lender name is your current lender.
  • You mentioned that most of the closing costs are included in the cost of the new home.  I am a first time homebuyer, bought end of the year.  Is there anything I can deduct?
  • Thanks Texas Roger! I'll give that a try.
  • But one more question:  You mentioned that the lender name is my current lender.  I'm a little confused by that.  Initially, I got my loan through 1st Portfolio Lending -- they then sold it to Wells Fargo prior to the first regular payment.  Wouldn't that mean I initially paid the interest to 1st Portfolio?  So confusing!  Thanks.
  • Yes whoever the loan new lender was at the time of closing.
  • what about the appraisal and inspection fee for the rental property purchasing
  • Expenses incurred purchasing a rental are treated differently than buying a home. Most expenses for a rental purchase are deductible.
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