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July 15, 2020
Question

Bought a home in November and no payments until January. No 1098. What do I do?

  • July 15, 2020
  • 2 replies
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2 replies

Employee
July 15, 2020

Unless you prepaid some mortgage interest or property tax, or loan origination fees in 2019, you do not do anything with it.  Just buying a house is not entered on a tax return.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Employee
July 15, 2020

You wouldn't enter anything for the home unless you paid settlement costs at the time of closing that could be deductible. Without paying mortgage interest for the year, you may not have enough itemized deductions for a small amount of settlement expenses to benefit you.

 

Most expenses at closing on the purchase or refinance of a home are added to the cost of a home and are not deductible but are added to the cost basis of the home.  There are a few exceptions - the following would be deductible:
1. Interest paid at the time of purchase (the charge at closing would normally be done for interest up to the date of first payment.) This is sometimes included in the 1098 from the new lender.
2. Real estate taxes charged to you and not reimbursed by seller
3. Points or origination fees.  On a refinance they need to be amortized over the life of the loan unless the points were used to improve your main home.

4. Private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization.
Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, attorney fees, etc. are not deductible, but are added to the cost of the property.