Can I deduct the closing costs on a new house purchase?

[naikakshara]

I received Form 1098 from my lender which shows the interest paid and points paid on purchase. I was able to deduct those. But what about my closing costs I paid when I bought the house? Where do I deduct closing costs when filing taxes?I paid over $6000 in closing costs. Aren't those deductible?Also I paid about $2300 in Mortgage Insurance Premiums. When I added that to my deductions it did not increase my refund. Why? Shouldn't I be getting tax benefits for paying Mortgage Insurance Premiums?

[Texas Roger · Accepted solution]

Most expenses at closing on the purchase or refinance of a 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.

4. Private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization.

NOTE: As of February, 2018, the private mortgage insurance cost deduction had not been extended to 2018 federal tax returns and cannot be deducted. 

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.

[Texas Roger]

Settlement fees or closing costs that can be included in the basis include any fee you would have had to pay even if you paid cash for the home. So mortgage insurance would not be included in the basis but title insurance would be included in the basis.

[Fern]

See Turbo Tax FAQ - <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1899651-what-kinds-of-refinancing-costs-can-i-deduct">https://ttlc...>

[JackRafter]

The deductible mentioned in number 4 expired 12/31/16 and is currently not available for Tax Year 17 returns.

[feldevi]

Can lake association cost be deducted?

[RobertG]

Unfortunately, homeowners' association (HOA) fees paid on your personal residence are not deductible.

However, if you have an office in your home that you use in connection with a trade or business then you may be able to deduct a portion of the HOA fees that relate to that office.

If the home is a rental property then you can deduct the HOA fees as a rental expense.

@feldevi