Are closing costs on a primary residence tax deductible?

Question

Recently, I purchased a single family home from a builder. Are the closing costs that I paid tax deductible? Also, if I refinance this year itself, are these closing costs and/or points tax deductible as well? Any information is greatly appreciated!

Answer 1

For purchasing a primary residence points are deductible, rest of the closing costs aren't (except for any outstanding real estate taxes that you had to pay as part of the closing costs). For refinancing, the only thing different is that you have to write off the points over the life of the loan. Prepaid interest would be listed on the closing costs but would be included in the end of year statement you receive from the lender indicating how much mortgage interest you paid for the year.

Answer 2

The only answer you can get is typically. Typically, fees are deductible. i.e. origination fees and points to buy down your rate. Title insurance, filing fees, flood determination, credit report, commitment fees, closing fees, other tax service fees, attorney work, appraisals, are not deductible. You can get a deduction for the taxes that you pay, but you can't deduct the full amount if you received a credit from the seller for taxes. You may also need to ask a CPA if the seller paid any costs on your behalf that they are allocated according to the non deductible fees.

Answer 3

Most closing costs are not deductible.

The only deductible items are interest, property taxes and points.

If you refinance, again the points are deductible, but not all in one year. You must spread them out over the life of the loan.