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,
- points (sometimes called origination fees and expressed as a percentage of the amount borrowed.) On a refinance they need to be amortized over the life of the loan or 84 months, whichever is less, unless the points were used to improve your main home, and
- 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, home inspection, flood certificate, attorney fees, etc. are not deductible, but are added to the cost of the property.
Mortgage interest, refinancing, property taxes and mortgage insurance are all under the Deductions and Credits tab for "Your Home."
People come to TurboTax AnswerXchange for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:
- Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
- Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
- Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
- Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
- Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.