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Mortgage Purchase/Refinance and Filing Taxes?
If we bought the house this year and then refinanced within the same year (for a rate reduction only); do we get to use both settlement figures for the tax deductions? I know there are certain allowable deductions when purchasing or refinancing -- but can they both be used in same year's taxes?
2 Answers
- Anonymous1 decade agoFavourite answer
You can only deduct mortgage interest (interest from your monthly payments and pre-paid interest from your settlement costs) as well as property taxes. You cannot deduct any miscellaneous garbage fees.
You can deduct points as they are considered pre-paid interest too. While you can fully deduct all points from your original mortgage, you MUST amortize points from your refi over the next 30 years--you cannot deduct refi points all at once.
Source(s): I've read the tax code on mortgage interest many times. Go to www.irs.gov and search for mortgage interest.