The Closing
- Introduction
- Before the Closing
- Home Inspection
- Sample Closing Costs for Items Paid by Buyer
- The Closing Timetable
- Loan Closing Checklist
- Tax Documentation
Tax Documentation
Once you officially become a property owner, you should keep good records for tax purposes. As we discussed previously, owning a home is one of the last middle-class tax shelters. Your closing documents contain valuable tax deductions. Make sure you save an extra copy of your closing statement for your tax accountant. Here's a quick summary of what's deductible and what's not:
Deductible
- real estate taxes paid by you at closing
- interest expense paid by you at closing
- points paid (subject to some limitations)
Non-Deductible
- homeowner's insurance premiums*
- water and sewer charges*
- prorated oil or other utilities*
- other expenses of a personal nature*
Other items on your statement may add to the tax basis of your home. Some of these items are:
- brokers' commissions
- attorneys' fees
- recording fees
- title search and survey