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Closing costs are generally NOT deductible.
However - some items included into HUD1 may be deducted in the year paid.
- prorated real estate taxes - from the day of purchase till the end of the year
- mortgage interest - but that amount might be already included into 1098 - if so - no double deduction.
Points may be deductible as mortgage interest - these are also reported on 1098.
All other closing costs you paid are added to the basis of your property and will reduce the gain when the property eventually will be sold.
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