Home Purchase Closing Costs Credit - is it deductible to buyer?

Forum|Forum|2 years ago
April 14, 2024
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Hello,

I am in the process of purchasing a house ("the buyer"). During the process, the seller has agreed to "compensate the buyer" an amount "by allocating funds toward the buyer's closing costs at settlement". My questions:

1. Is it the same as Closing Costs Credit?

2. Is it tax deductible for me as the buyer?

3. (if the answer to 2 is yes) What type of forms/documents should I need to obtain, and from who (the seller or the lender) so then I can deduct it from my AGI.

Not A Product Question

Best answer by JulieS

No, the "credit" just changes the amount you have paid for your home. If this is your personal residence, not a rental property, it doesn't affect your tax return until you sell the home.

MinhT1

Yes, these are closing costs credits. They aren't tax deductible for you.

This credit will reduce the cost basis of your home.

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mortezadmAuthor

Hi,

Thank you for your response.

I am also wondering if I will be paying any taxes on that credit as income or something.

JulieSAnswer

No, the "credit" just changes the amount you have paid for your home. If this is your personal residence, not a rental property, it doesn't affect your tax return until you sell the home.

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