Can I deduct closing cost, taxes etc. for a summer cabin I purchased in 2018?

[boomer71447]

I paid cash for the cabin.

[Texas Roger]

Most expenses at closing on the purchase or refinance of a home or second home are added to the cost of a home and are not deductible but are added to the cost basis of the home.  There are a few exceptions - the following would be deductible:

1. Interest paid at the time of purchase (the charge at closing would normally be done for interest up to the date of first payment.) This is sometimes included in the 1098 from the new lender.

2. Real estate taxes charged to you and not reimbursed by seller

3. Points or origination fees.  On a refinance they need to be amortized over the life of the loan unless the points were used to improve your main home.

NOTE: The private mortgage insurance deduction expired and was not extended for 2018.

4. 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.

[QuickElbows]

Where do I enter those amortized loan points on the tax return?  Do I put it in like mortgage interest on Schedule A?

[Texas Roger]

Yes you enter the amortized loan points in the mortgage interest section of deductions and credits. After entering most of the other mortgage information you will come to a screen that asks about points. 

[QuickElbows]

Thanks so much!!

[Carl]

If the purchase qualifies, the program will ask you for things like abstract fees, title fees and the such separately. Points is it's own thing. After entering all those amounts the program will add those things that qualify, to the cost basis of the home. It will also deduct those things from taxable income that qualify as a deduction.

Generally speaking, any fees associated with acquisition of the loan are deducted. For example, loan origination fees. Fees associated with the acquisition of the property are added to the cost basis of the property. For example, title transfer fees.