Category: Finding Deductions
What "Closing Costs" Can I Deduct When Purchasing a Home?
Congratulations on the purchase of your new home!
When you purchased your home, you may have paid what is called "settlement" or "closing costs" in addition to the contract price. These costs are typically divided between you and the seller according to the sales contract. If you built your home, these costs were probably paid when you bought the land or settled on your mortgage.
The only settlement or closing costs you can deduct on your tax return for the year the home was purchased or built are Mortgage Interest and certain Real Estate (property) taxes. These can be deducted in the year you buy your home if you itemize your deductions.
For additional tax information for homeowners, please see IRS Publication 530.