Submitted By: someone
Answered: December 22, 2021 12:04 am

I just bought a home. Can I deduct my closing costs?

If you itemize your personal deductions, the portion of closing costs representing real estate taxes may be deductible. And points paid to obtain a mortgage may be deductible in full or have to be spread over the term of the mortgage (depending on certain conditions). But other closing costs, such as attorney’s fees, are not deductible; they are added to the basis of the home, which will reduce reportable gain on a future sale.

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Tax Glossary

Capital gain or loss

The difference between amount realized and adjusted basis on the sale or exchange of capital assets. Long-term capital gains are taxed favorably. Capital losses are deducted first against capital gains, and then again up to $3,000 of other income.

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