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my loan was sold after closing to another lender (my current lender forwarded a 1098 form covering interest paid on the loan for 2012).....do I use figures from my HUD-1 statement for loan origination deduction - line 1400 is total Settlement Charges??

what line items on the HUD-1 are deductible?
  • Where is this entered on TurboTax?
  • Assuming this was for your primary residence, under Deductions & Credits select the Explore On My Own option. Then start with Your Home and go from there. Note that each individual 1098 received, needs to be entered separately. Once you identify that it was sold, refinanced or whatever, you'll be prompted for HUD-1 information.
    Enter them separately, starting with the 1098 for the "old" loan first.
    When you enter that first 1098, as you work through you'll be asked if you "paid off" that loan. Indicate you did if this applies, so that the remaining amortized points/origination charges will be deducted for 2012.
    When you enter the 1098 for the "new" loan, you'll amortize the origination fees/points over the life of the "new" loan. If you just add the two 1098's together, then you will NEVER be able to dedcut the remaining amortized cost of the old laon; you just lose the deduction forever.
    Note here, because there's two types of HUD-1 statements out there.
     The "official" HUD-1 statement can be seen at http://www.hud.gov/offices/hsg/rmra/res/hud1.pdf
    On this form, line 801 is the origination fees "without" the points included.
    Line 802 is the points.
    Line 803 is the origination fees "WITH" the points included.
    If you have the old style HUD-1 statement that does not separate the points from the origination fees, then the points are INCLUDED in the origination fees.
    All deductible expenses are listed on page 2 of the HUD-1 statement, beginning at line 700 WITH ONE EXCEPTION (covered here)
    As the buyer, you can only deduct those expenses with an amount under the "paid from borrower's funds at settlement" column.
    If you are the seller, you can only deduct those items with an amount under to "paid from seller's funds at settlement" column.
    For both, any amounts listed on lines 1000-1009 ARE NOT a deductible expense.
    For the seller, amounts on lines 1000-1009 are added to the cost basis of the property you sold, thus decreasing your taxable gain on the sale.
    For the buyer, you have NO DEDUCTION for the amounts on lines 1000-1009. Monies reported on these lines are placed into an escrow account, in your name. Money from the excrow account is used to pay recurring expenses such as homeowner's insurance and proeprty taxes WHEN THEY COME DUE, and not before. Any escrow funds used to pay any TAX DEDUCTIBLE expenses, will be reported to you separately by the lender, on a form 1098 or "substitute" 1098 at the end of each tax year
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Assuming you closed the loan in 2012, then yes.
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