Refinance Home Mortgage Expense

I am refinancing my Home Mortgage and need to determine what expenses can be deducted on taxes. The expense charges on the refinance are listed below - which of these can I deduct on taxes (I do my own taxes via TurboTax):

- Financial Institution's Origination charge ($695) - Appraisal Fee ($400) - I asked about this in another message, but will include it here - Credit Report Fee ($17) - Flood Cert Fee ($9) - Tax Service Fee ($78) - Wire Fee ($20) - Title Services and Lender's title insurance ($1,137.50) - Government recording charges ($75) - Daily Interest Charges ($231.20)

Thanks and appreciate any insights/suggestions any of you can provide.

charliec

Reply to
charliec
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include it here

The interest. $231.20.

If the $695 is 'points', they are divided over the life of the loan, so

1/15 or 1/30 etc, per year.
Reply to
JoeTaxpayer

include it here

For sure: the $231.20 of interest, although that should be included in the new loan's 1098 figure. Maybe: The origination charge of $695. IF it's points (see Pub 936) you amortize it over the life of the loan.

Phil Marti VITA/TCE Volunteer Clarksburg, MD

Reply to
Phil Marti

deducted on

include it here

Also I think only

- Title Services and Lender's title insurance ($1,137.50)

- Government recording charges ($75)

get added to your cost basis, so in a sense they're deductible when you sell your home at a gain over the exclusion amount.

Is it necessary to deduct the 231.20? Won't it be included on the

1098 already?
Reply to
removeps-groups

deducted on

include it here

Thanks for the reply.

Reply to
charliec

I disagree. These are costs of getting the refi loan, not of purchasing or improving the property.

See Pub 530.

Phil Marti VITA/TCE Volunteer Clarksburg, MD

Reply to
Phil Marti

You're right . Publicati BEGIN QUOTE

The following items are some settlement fees and closing costs you cannot include in the basis of the property.

1.Casualty insurance premiums. 2. Rent for occupancy of the property before closing. 3. Charges for utilities or other services related to occupancy of the property before closing. 4. Charges connected with getting a loan. The following are examples of these charges. 1. Points (discount points, loan origination fees). 2. Mortgage insurance premiums. 3. Loan assumption fees. 4. Cost of a credit report. 5. Fees for an appraisal required by a lender. 5. Fees for refinancing a mortgage.

If these costs relate to business property, items (1) through (3) are deductible as business expenses. Items (4) and (5) must be capitalized as costs of getting a loan and can be deducted over the period of the loan.

END QUOTE

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removeps-groups

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