I bought a home last year and I got my HUD1 statement where I can see my mortgage interest charges, my "per diem" interest charges and my closing costs. How can I deduct those closing costs and other fees (i.e. prep fees? Realtor fees?) in my 2006 taxes?
2007-03-15 06:45:48 · 4 answers · asked by zaxxon 3 in Business & Finance ➔ Taxes ➔ United States
Only the mortgage interest and points are deductible. They'll be listed on the Form 1098 form your lender; just verify the amounts.
Prepaid impounds have no tax consequences as they're just deposits for future expenses.
Property taxes on the HUD-1 may be deductible, depending upon how they're treated. Amounts credited to the seller are deductible by you, amounts credited to you are not.
The remaining costs are not deductible but are added to your cost basis and will reduce your gain when you sell.
2007-03-15 07:01:24 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
If you are using Turbo Tax they have the line items for those purposes. It asks if you bought or sold a house and if you did it then brings up those sections to add your numbers.
2007-03-15 13:52:23 · answer #2 · answered by professorc 7 · 0⤊ 1⤋
I used H&R Block Tax Cut and was asked all kinds of questions. If you aren't using tax software, go to the IRS website and search for the information (or you can call them - they are very helpful)
http://www.irs.gov
2007-03-15 13:54:30 · answer #3 · answered by Enchanted 7 · 0⤊ 1⤋
Most of the fees paid are not deductible at all.
2007-03-15 14:03:33 · answer #4 · answered by Wayne Z 7 · 0⤊ 1⤋