Is builder paid closing cost tax deductible?

Answer 1

For him yes as a business expense. For you no, of course not. The builder paid it not you.

Answer 2

For the builder, sure!

Most closing costs are NOT deductible by the buyer anyway. Any property taxes pro-rated through closing and any prepaid interest is deductible by the buyer but ONLY if the buyer actually paid those items.

Other non-recurring closing costs are added to the buyer's cost basis and will therefore reduce the gain on sale when they eventually sell the property. However the buyer still would have to pay the costs in order to add them to their basis so anything paid by the builder/seller have no tax consequences for the buyer. (Presumably any seller-paid costs would be reflected in the selling price so that's really a moot point.)

Answer 3

Points paid are deductible for you regardless of who pays them.

Closing costs are not.