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What all is included inn abstract and recording fees?

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June 4, 2019
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Best answer by MichaelDC

Abstract – A title insurance professional must perform a title search and produce documentation on the home’s title. The abstract is a concise summary of that search and official documents related to the immovable property. ($100-$200 depending on the length and complexity of the abstract)

Government Recordation Charges – The recording fee is paid to a government body which enters an official record of the change of ownership. ($85 for the Cash Sale/Deed, $225 for a mortgage, and these charges will vary slightly from parish to parish)

According to the IRS:

"These are recorded on your Closing/Settlement statement (HUD). Many other settlement fees and closing costs for buying the property become additions to your basis in the property and part of your depreciation deduction, including:

Abstract fees
Charges for installing utility services
Legal fees
Recording fees
Surveys
Transfer taxes
Title insurance
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)."

Please feel free to post any additional details or questions in the comment section.

M

MichaelDCAnswer

Employee

Abstract – A title insurance professional must perform a title search and produce documentation on the home’s title. The abstract is a concise summary of that search and official documents related to the immovable property. ($100-$200 depending on the length and complexity of the abstract)

Government Recordation Charges – The recording fee is paid to a government body which enters an official record of the change of ownership. ($85 for the Cash Sale/Deed, $225 for a mortgage, and these charges will vary slightly from parish to parish)

According to the IRS:

"These are recorded on your Closing/Settlement statement (HUD). Many other settlement fees and closing costs for buying the property become additions to your basis in the property and part of your depreciation deduction, including:

Abstract fees
Charges for installing utility services
Legal fees
Recording fees
Surveys
Transfer taxes
Title insurance
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)."

Please feel free to post any additional details or questions in the comment section.

V

Vil

I have attached fees, can you tell me which one is "Abstract Fee", Legal fee, title search, document preparation, land survey, transfer or stamp taxes?

Thanks,

S

sjcox99

All I had was a closing disclosure. I called out mortgage company and she said as of 2017 they were not long using the HUD1 form. My form looks exactly like the one posted above.

J

JamesG1

2017 was about when the form was changed. The HUD-1 is a required disclosure form. See this:

'According to the RESPA act, the HUD form is to be used by all lenders of loans providing funds for real estate purchases and refinances of real estate loans and must be given to the borrow at least one day prior to the date of settlement.'

Hopefully, you received something that reflected the actual (and not proposed) costs of the sale/purchase of the property.

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V

Vil

Attached is Closing disclosures. In addition to this I received ALTA Combined Settlement Statement which looks like this one here - https://files.consumerfinance.gov/f/201311_cfpb_kbyo_closing-disclosure.pdf

Do you have any recommendations how can I find what is abstract and fees. I was able to locate recording fees.

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gnugen

@lilacs After 8 responses, 3 of which were from "Experts", it seems to me that your questions wasn't really answered. I have the same question as you because my Closing Disclosure does not explicitly identify "Abstract" fees. If these are in fact the $100-200 Title Search fees, as mentioned above, then why does my Closing Disclosure devote a line for "Title - Search and Exam" not "Abstract" (which in my case was $17.50), and why does Turbo Tax have an entry box for "Legal Fees, Title Search, Document Preparation"? There must be a correct answer to this question since Turbo Tax devotes an entry box for this topic. Can someone please elaborate on an accurate answer?

DMarkM1

As JohnB5677 mentions above the Abstract is a bundle of documents that would include a title search. Many times an "Abstract" is not part of the closing so the other items would be individually listed. That is why you see the lines separated in TurboTax.

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G

gnugen

@DMarkM1

First, thank you for the reply as I do believe you and others are trying to help. However, I’m still not satisfied that the original question is being answered appropriately. So, let me ask the question in a different way.

My version of TurboTax requests that dollar values are entered into two consecutive entry boxes for "Abstract and Recording Fees” (let’s call these A and B, which go in box 1) and "Legal Fees, Title Search, Document Preparation” (let’s call these C, D, and E that go in box 2)

If the Abstract (A), as stated by you and others, does in fact include the Title Search (D), then why am I asked to provide a cost for the Title Search twice (A in box 1, and part of A, or D, in box 2)? Remember that you keep saying the Title Search (D) is actually part of the Abstract (A). This does not make sense to me, and seems like “double-dipping”. Please explain. 🙂

H

heaton934

I’m having the same problem you are. I have talked to a half dozen people from Turbo Tax about what needs to go on what line, so confusing. Basically I was told I would have to pay more to have someone from Turbo Tax with more experience that can look at my closing disclosure and help me figure out what to do.
I thought these were professionals. I’m about to take them to someone that knows what they are doing.

M

mglauner

@heaton934 If you just purchased a home, there's not much you can deduct for taxes, unless you purchased a Rental Property.

Real Estate Taxes and Mortgage Interest are the biggest ones. You should get a Form 1098 to report these in TurboTax.

If you look at your closing documents, there may be some extra real estate tax on them that is not included on Form 1098 that you paid at closing.

If you paid points to secure your loan, that will shown on your Form 1098 also.

Click this link for more info on Deducting Closing Costs.

If you did buy a Rental Property, all the closing costs are added to the Cost Basis of the property when you set it up in the Rental section.

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heaton934

I did purchase a rental property, I found it very confusing. I’m assuming you can’t add any of the points, real estate taxes, insurance. There are numerous fees ect, so are you saying you can add everything on your closing disclosure?

JohnB5677

Closing costs that are not deductible include on your current tax return, (Often called Abstract and Recording Costs)

Tax stamps,
Attorney fees,
Title insurance,
Title search and
Document preparation fees.
However, those costs can be included in your cost basis when selling your home.

Only a few items can be deducted on your current taxes. The IRS denotes the following as deductible costs:

Sales tax issued at closing
Real estate taxes charged to you when you closed
Mortgage interest paid when cost was settled
Real estate taxes that were paid for by the mortgage lender
The interest you paid at the house’s purchase
Loan origination fees (a.k.a. “points”). These would be written as a percentage of the borrowed money.