Real estate deductions:
With a new year just days away…it’s important to be clear on what home buying and selling costs are deductible. While some wait until April 15th to file taxes, I recommend you avoid the last minute frustrations and get organized early.
Here are the important items that are overlooked when considering deductions.
Any points you or the seller pay to purchase your home loan are deductible for that year. Property taxes and interest are deductible every year. But while other home-buying costs (closing costs in particular) are not immediately tax-deductible, they can be figured into the adjusted cost basic of your home when you go to sell (any significant home improvements also can be calculated into your basis).
These fees would include title insurance, loan application fee, credit report, appraisal fee, service fee, settlement or closing fee, bank attorney’s fee, attorney’s fee, document preparation fee and recording fees.
Points paid when you refinance an existing mortgage must be deducted over the life of the new loan.
Be sure to confirm this information with your Accountant or C.P.A.