- quote -

But expenses related to establishment of clear title even if required
for the mortgage are part of the basis for the property. e.g. Title
insurance and search.

--
Frederick E. Jorden http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207 Richmond, VA 23235-5247
EMAIL knowtax[at]bigfoot.com
(804) 320-6210 FAX (804) 320-6211

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- quote -

Not all get added to basis. From Pub 527:

Settlement fees and closing costs that are for buying the
property are part of your basis in the property. These
include:

Abstract fees,
Charges for installing utility services,
Legal fees,
Recording fees,
Surveys,
Transfer taxes,
Title insurance, and
Any amounts the seller owes that you agree to pay, such as
back taxes or interest, recording or mortgage fees, charges
for improvements or repairs, and sales commissions.

Some settlement fees and closing costs you cannot include in
your basis in the property are:

1) Fire insurance premiums,
2) Rent or other charges relating to occupancy of the
property before closing, and
3) Charges connected with getting or refinancing a loan,
such as:
a) Points (discount points, loan origination fees),
b) Mortgage insurance premiums,
c) Loan assumption fees,
d) Cost of a credit report, and
e) Fees for an appraisal required by a lender.

Also, do not include amounts placed in escrow for the future
payment of items such as taxes and insurance.

----- end quoted text

--
Drew Edmundson, CPA (NC)

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- quote -

Correction - SOME of your "closing costs" are added to the
basis of your home. Expenses related to getting a mortgage
(credit report, bank document fees, etc) are neither
deductible nor added to basis.

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cj.green[at]worldnet.att.net (Christopher Green) wrote:
- quote -

Correction - SOME of your "closing costs" are added to the
basis of your home. Expenses related to getting a mortgage
(credit report, bank document fees, etc) are neither
deductible nor added to basis.

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"Thomas" <MT[at]Gaia.org> wrote:

- quote -

Points can be deductible. Points are fairly easy to
recognize: they're called "points". In some places and with
some lenders, there's an "origination fee" that's stated as
a percentage of the loan; my understanding has always been
that these are also points. For points to be deductible, you
have to pay them out of pocket (rather than paying them out
of loan proceeds), and it has to be a purchase (not a
refinance) transaction. Otherwise, you have to amortize
points over the life of the loan.

Other closing costs add to your basis. If you're lucky
enough to have a profit in excess of the exclusion when you
sell (or unlucky enough to not qualify for the exclusion),
they'll reduce your taxable gain then.

--
Chris Green

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"Thomas" <MT[at]Gaia.org> wrote:

- quote -

No. Points may be deductible, but closing costs are not.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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- quote -

Your costs, other than real estate tax, interest and points,
are added to the basis of your home. Your deductions are
limited to the interest/points (paid by you and/or the
seller), real estate tax (not including tax stamps,etc).

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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I bought a condo and I don't have any income or investment
properties or home office. Are my closing costs tax
deductible?

Thanks

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