The IRS Deductions Blog

Question: Are other mortgage purchasing fees deductions?

Trying to find out if there are any other fees, related to the purchase of a home, that could be claimed on my Itemized Deductions. I am a first time home buyer, but was 45 days too early. Because of the loan I have I don’t have mortage insurance premiums either

So that leaves property taxes and my mortgage interest, which when added up dont exceed my standard deduction. I also had to pay several other misc fees during the purchasing process including an application fee, a lockin fee, an origination fee (1% earnest money I guess its called also, which went to escrow) and at least one other

Are any of these consider tax deductible also? Especially the origination fee. Also I know I should get a 1098 from my credit union (they handle my mortage) but should I be receiving something from my escrow place as well for the portion paid to them?

Thanks

Answer: Yes and no. If you paid any pre-paid interest, usually referred to as ‘points’, that money is deductible as mortgage interest.

Application fees, documentation fees, credit check fees, lawyers fees, any fees related to getting the mortgage, are not deductible. Instead, they become part of the cost basis of the property, which is used to determine profit, if any, after a future sale.

Let’s say you paid $100K for the house and $1500 in acquisition expenses that are not tax-Deductible Interest. Your basis in the property is $101,500.

The only exception would be if the fees were necessary in getting a mortgage related to a job-based move. Then, these expenses may be deductible as moving expenses. Only a qualified tax expert can determine this for you.

Items on Amazon Right Now for Tax Deduction Loan Origination Fee:

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UPDATED: The 153-page bill makes a number of changes to the Senate bill. The highlights: —Increases the tax credits for middle-income families who buy insurance. —Reduces the penalty for not buying insurance from $750 to $695. But the bill also requires some people to pay a share of their income as a penalty and that number was raised from 2 percent to 2.5 percent. —It closes the gap in Medicare …

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