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Tax Planning/Tax basis when refinancing primary or second home.


Should closing cost associated with refinancing a primary or secondary home be added to basis?

I understand that points and loan origination fees will be amortized over life of the loan.

What about other cost associated with the loan, including appraisals, assumption fees, flood determination fees, loan processing fees (HUD line 804-811)?  Would these be added to basis?

What about title, recording, settlement charges, would these be added to basis?

Usually it's the HUD statement that is used as a reference. If you were audited you would have to prove the costs. My take is anything listed on the HUD statement should be fine. If there are other costs not on the statement, just keep the records so you can submit them if asked. Since most other costs tend to be a small percentage of the total, I don't think you'll have any problems. I would get TurboTax, or similar, and follow the guidance in the software.

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Richard S


My expertise is in collecting past due taxes and tax returns. While at the IRS I worked on wage and bank levies, liens, Offer in Compromise, late filing and payment agreements every day. I spoke with over 20,000 people concerning their issues while I worked there (just retired).


Ten years working for the the IRS in Collections and tax return review. Worked with over 20,000 people on their IRS issues. Explained their options and usually worked out a solution while they were on the phone.

Masters Degree from Iowa State in Ames.

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