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Itemized Deductions Schedule-A


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Old 02-01-2011, 01:38 AM
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bought a condo in March 2010(California)

bought a condo in March 2010(California)
I 've got 1098 form,
what do I do with closing costs, all kinds of fees?
are they deductible



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Old 02-01-2011, 02:34 AM
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Your closing costs, other than real estate tax, interest and points( all deductible on SCh A of 1040 as long as you claim your itemized deducitons), are added to the basis of your home. Your deductions are limited to the interest/points (paid by you and/or the seller), real estate tax (not including tax stamps,etc).Some of your "closing costs" are added to the basis of your home too. Expenses related to getting a mortgage(credit report, bank document fees, etc) are neither deductible nor added to basis.



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Old 02-02-2011, 08:37 PM
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thanks,
I have 3 items in my closing statement
Property Tax
City transfer tax
Documentary transfer tax
Do all of them itemizable on SCH A?
thanks



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Old 02-02-2011, 09:54 PM
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“Property Tax:----> Yes you can; you can deduct your property tax on Sch A line 6 and the tax decreases your taxable income not AGI( as long as you claim your itemized deductions; itemized deductions> standard deduction)
“City transfer tax”----> No, you can’t deduct this tax on Sch A; you cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home. You, as a buyer, pay them, include them in the cost basis of the property. The tax will increase the basis of your Condo and will reduce your LTCG whenyou dispose of your condo.
“Documentary transfer tax”---->No you can’t deduct the transfer tax on your Sch A either; as City transfer tax, it is added to the basis of your Condo (It will increase its basis).



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