Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Cost of Mortgage refinace / tax
Posted by: Island, September 13, 2012 10:04PM
We are looking at refinacing but want to know what cost(s) of refinancing can be deductable on our tax return. Looking at 20yrs fixed rate. Thank you for your help.

Island

Re: Cost of Mortgage refinace / tax
Posted by: goose, September 13, 2012 11:38PM
You haven't stated if the refinance is for a personal residence, or rental real estate (commercial or residential), or whether you're going to refinance for the remaining balance of the original mortgage, or increase it, and by how much.

Re: Cost of Mortgage refinace / tax
Posted by: MadDog, September 14, 2012 12:52AM
you have also not said what you mean by the cost of refinance. One cost is interest, including prepaid interest (points), and that is easy to answer if you provide the detail that goose asked for. Other costs are related to the act of financing, including appraisal fees, and so on, which will attach to the loan and may or may not be deductible under a different set of rules again related to whether the property in question is income producing.

Re: Cost of Mortgage refinace / tax
Posted by: caesark, September 14, 2012 01:53PM
Now that you have been intimidated and abused for asking the question, the likely answer is that virtually none of the cost of refinancing are deductible. Correct me if I am wrong, but I belive you are asking about your personal residence.

Re: Cost of Mortgage refinace / tax
Posted by: caesark, September 14, 2012 01:53PM
Now that you have been intimidated and abused for asking the question, the likely answer is that virtually none of the cost of refinancing are deductible. Correct me if I am wrong, but I belive you are asking about your personal residence.

Re: Cost of Mortgage refinace / tax
Posted by: Island, September 14, 2012 05:18PM
Thanks caesark for your suport-

Ans to the questions above:

-this is for a personal/primary residence
-finance the remaining $ balace of the original mortgage.

"what you mean by the cost of refinance?."
-this is for any costs/expenses of the refinance process like title fees, recording fees,appraisal fees, transfer fees,lender fee, the driver fee (heck they have this fee too), etc.

If I pay for point(s),can the points be deductable?

I know the interest on the mortgage is deductable.

Thanks all.

Island




Re: Cost of Mortgage refinace / tax
Posted by: Art, September 14, 2012 07:40PM
And is would seem none of the other items is deductible.

Re: Cost of Mortgage refinace / tax
Posted by: Island, September 14, 2012 08:28PM
are your sure? not even the points?

Re: Cost of Mortgage refinace / tax
Posted by: Art, September 14, 2012 08:48PM
Do people still pay points on a refi?

I didn't see it listed in your message.

Yes, points are amortizable over the life of the mortgage (meaning you can deduct them) provided it's not from the same lender.

Re: Cost of Mortgage refinace / tax
Posted by: Art, September 14, 2012 08:48PM
Do people still pay points on a refi?

I didn't see it listed in your message.

Yes, points are amortizable over the life of the mortgage (meaning you can deduct them) provided it's not from the same lender.

Re: Cost of Mortgage refinace / tax
Posted by: goose, September 15, 2012 12:17AM
caesark- I didn't realize that asking for clarification of conditions relevant to a multi-phased issue is intimidating.

Re: Cost of Mortgage refinace / tax
Posted by: caesark, September 15, 2012 01:50PM
goose,
It happens frequently on this board. A simple question is answered with several questions. It's like shining a high powered focused halogen bulb in the eyes of the non professonal. I understand there is no harm intended. It's simply a matter of style. Most of the time reasonable assumptions can be made (and stated) and the correct answer provided with 90% accuracy.

Re: Cost of Mortgage refinace / tax
Posted by: caesark, September 15, 2012 01:51PM
If the points paid are similar to amounts paid by others for similar loans, i.e. no manipulation of the closing statement to accommodate someone's ulterior interest), then they can be deducted ratably over the life of the loan. The IRS goes into great detail to define the circumstances due to the rampant abuse associated with mortgage lenders. If you have the stomach, you can click and read: [www.irs.gov]

Re: Cost of Mortgage refinace / tax
Posted by: MadDog, September 15, 2012 04:54PM
As one who apparently intimidated and abused the OP, I'm with goose. While it may be true that one can infer facts "most of the time," there were too many open possibilities in the OP. Costs of refi are many and most are not deductible. I think both goose and I were trying to be helpful. There are situations where posts are abusive, but that's quite clear when it occurs.

one out of ten
Posted by: jainen, September 15, 2012 06:52PM
>>there were too many open possibilities in the OP<<

Not understanding the issues was inherent in asking the question itself. I hate and even fear unsupported assumptions, a blight on professional tax work. It was entirely proper to get the important specifics before giving an answer that would otherwise probably be wrong, according to caesark, one out of ten times.



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