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What closing costs are deductible

Customer Question
We bought a new home...
We bought a new home in 2007 (primary residence, not first home). In New York City, you pay a mortgage tax on the amount of the mortgage obtained for a home purchase. Is this deductible? If so, where is it claimed?
Submitted: 9 years ago.Category: Tax
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3/3/2008
Tax Professional: WebTaxMan, Tax Accountant replied 9 years ago
WebTaxMan
WebTaxMan, Tax Accountant
Category: Tax
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Experience: 20+ Years experience-CPAs & My Own Business/IRS Authorized e-file Provider/CA Tax Education Council
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Hi MMK,

Unfortunately, the IRS does not allow a deduction for New York's Mortgage Recording Tax. The tax benefit you do get is that it is actually added to the basis of your home, so that if you should eventually sell the home, the gain will be reduced by the increased basis.

Click here to read more about the NY Mortgage tax.

If you need further information on what is actually deductible in your closing costs, please let me know. For example, one often overlooked deduction for the buyer is seller paid points.

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Regards,

Mike

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