My house went into foreclosure in 2006 and we were able to make a full payment to bring it current in December. This payment included late fees, lawyer fees, and inspection fees... are any of these tax deductable?
2007-02-19 10:46:59 · 6 answers · asked by spontaneousknight 1 in Business & Finance ➔ Taxes ➔ United States
No none of those expenses are deductible on the Federal Tax return.
Only legal fees paid in relation to a tax matter or in the production of taxable income could be deductible
Publication 936
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2007-02-19 10:58:35 · answer #1 · answered by Anonymous · 1⤊ 1⤋
The attorney's fees are only deductible to the extent that they apply to tax advice or planning related to the foreclosure. Those that aren't can be used with most of the other costs to adjust the sales price when calculating any gain on the "sale" of the home to the bank.
2007-02-19 10:53:45 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 1⤋
You can't deduct legal expenses for personal matters that don't produce taxable income.
You also can't add the costs to the cost basis of your home since they were costs payable in connection with a loan.
They are just costs you incurred to keep your home and there is no tax benefit from having to incur these costs.
2007-02-19 11:00:06 · answer #3 · answered by T G 2 · 1⤊ 0⤋
You would not be able to deduct any of those fees, but if you paid some back interest which you probably did, that would be deductible.
2007-02-19 11:08:27 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
Interesting, I was wondering the same thing myself
2016-08-23 18:36:44 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Ask your CPA or call the I.R.S. help line
2007-02-19 10:49:08 · answer #6 · answered by Anonymous · 0⤊ 2⤋