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I bought a house in MAR2009 and calimed my first time homebuyer credit in 2008 (did an amendment for 2008). Now I am prpearing for 2009 and was wondering if my down payment (3.5% of loan) and PMI is tax deductible. In addtion, I replaced (2) doors (Energy Star) and applicance (Fridge/dishwasher). I also painted and replaced fixtures througout house (are these deductible)(apprx: 10k) . I make apprx 80K (total) in 2009 (Married filing jointly).

Submitted: 15 days and 4 hours ago.
Category: Tax
Value: $15
Status: CLOSED
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State/Country relating to question: Texas

Accepted Answer

Hello Marc,

 

You cannot deduct your down payment on the house. That is part of what you paid for the home and it is part of your basis in the home.

 

You may claim a deduction for the PMI that you paid. That is claimed as part of your itemized deductions on Schedule A, Line #13.

 

Any painting or fixtures or any type of repairs or improvements that you make are never tax deductible for any reason. They simply add to your basis in this home. When you eventually sell this home, at that time you will determine whether or not you have a taxable gain or loss on the sale by taking your selling price less your basis. So all of these improvements increase your basis, which at the time of the sale will reduce any gain you may have that is subject to tax.

 

As far as the Energy Star doors, these are eligible for a tax credit if they were installed in the year 2009 or 2010. The credit is equal to 30% of the purchase price, not to exceed a total of $1,500. The energy credit is claimed by completing Form 5695 and submitting that with your tax return.

 

The refrigerator and dishwasher you replaced do not qualify for any credits, but if they are built in appliances that will stay with the home when sold, then the cost of these appliances also add to your basis.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you Marc

 

 

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Expert: Merlo
Pos. Feedback: 99.8 %
Accepts: 
Answered: 11/7/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad

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