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June 6, 2019
Question

I sold my house in 2016 and also bought and closed on a new home in 2016 on 12/30/2016.

  • June 6, 2019
  • 1 reply
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Why am I not getting a tax break for my 2016 purchase?

1 reply

Employee
June 6, 2019

If you purchased a home on 12/30/16, you wouldn't have much interest to deduct as your first payment would not be until 2017. However, look to your disclosure statement for other possible deductions.

Other Items on closing disclosure form that may be deductible:

  • Interim interest paid at the time of purchase (the charge at closing would normally be done for interest up to the date of first payment). 
  • real estate taxes charged to you. 
  • points - On a refinance they need to be amortized over the life of the loan; unless the points were used to improve your main home.
  • private mortgage insurance but, if prepaid, only the amount allocable to this year based on an 84 month amortization. 

Other fees, such as commissions, attorney fees, preparation of deed, abstract fees, owner title insurance, recording fees are added to the basis of your home, and not deductible.

https://www.irs.gov/pub/irs-pdf/p936.pdf

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