What deductions can I claim on my new home purchase?

January, 28 2015 by Dave Du Val, EA

Hey Dave,

My wife and I bought a townhouse in 2014. What tax deductions can we take?

Jeremiah

 

Jeremiah,

Congratulations to you and your wife on the purchase of your new townhome. You may deduct any mortgage interest you paid, which will be reported to you on Form(s) 1098 from the lender(s). You may also deduct any points you paid on the loan origination; these amounts will be shown on your final escrow statement, which is sometimes called a settlement statement or HUD-1.  Also deductible are real estate taxes that you paid in 2014. If you paid qualified mortgage insurance premiums (and if your income is below a certain level), those would be deductible too. Most of the other expenses relating to the purchase are either adjustments to your basis (what you paid for the home, plus improvements you make) or not deductible.

I do hope that you and your wife enjoy your new townhome for many years to come.

Deductibly Yours,

Dave