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February 4, 2022
Question

With a refinance on my home what can I deduct of the fees I paid?

  • February 4, 2022
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1 reply

February 4, 2022

No.  If you paid fees to refinance your home they are added to the cost basis of your home. When you sell your home the combined cost basis will be used to offset any gain at that time (home sale exclusion may also apply at that time).

 

The amounts you are allowed to deduct for your home are mortgage interest and property taxes.

 

If you took additional money from the refinanced loan that were not used to buy, build or improve your home, then you must determine the allowed amount of mortgage interest you can deduct.  Only mortgage interest paid on the loan that was used directly on the home to buy, build or improve it would be allowed as a deduction.  

  • Any additional debt not used to buy, build, or substantially improve a qualified home isn't home acquisition debt. You can choose to make the entries yourself.

  • To review the information and worksheets you can use this link: IRS Publication 936, page 12.
  • See the example below if this applies to your refinanced loan.

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