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Old 01-10-2010, 06:59 AM
 
3,399 posts, read 3,494,038 times
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Default Is line 1004 and Line 801 of HUD-1 Tax deductible?

1. I ended paying $2900 on line 801 as part of my loan origination fee. The broker put it on line 801. I thought he would put in on line 802 (loan discount). But I've read it doesn't matter 801/802 as long as the mortgage was for a "qualified home purchased"

So its safe to assume my $2900 loan origination fee is tax deductible (this was a purchase and not a refinanced home).

2. Also is Line 1004 (county property taxes prepaid) in reserves depsoited by lender. It's $3300. Is that amount tax deductible? The lender pays the property taxes from escrow.

I have a new accountant I am working with (unfortunately my old accountant just passed away last month). He's saying I can deduct line 801. But line 1004 is not tax deductible. My previous deceased accoutant deducted line 1004 when I purchased my other house back in 2005.
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Old 01-11-2010, 06:52 PM
 
Location: Plano, Texas
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You should consult with a CPA on this question. But... loan origination is tax deductible in the year you bought home.

When did you buy the home? If you bought it this year than the tax money is placed into escrow and not technically paid to the lender. So you wouldnt be able to deduct until the following year. If this CPA cannot explain to you why it isnt deductible, i would suggest you find another CPA.
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Old 01-12-2010, 05:55 AM
 
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Quote:
Originally Posted by VictorBurek View Post
You should consult with a CPA on this question. But... loan origination is tax deductible in the year you bought home.

When did you buy the home? If you bought it this year than the tax money is placed into escrow and not technically paid to the lender. So you wouldnt be able to deduct until the following year. If this CPA cannot explain to you why it isnt deductible, i would suggest you find another CPA.
Thanks.

Yes purchased home in 2009. I have a CPA. We tend to disagree on some parts of tax law occasional. My previous CPA unfortunately is deceased so I've only been working with this CPA for over a year.

Yes, I had around $3300 prepaid put into escrow (lender pays real estate taxes from escrow). So he told me I can't deduct prepaid real estate escrow money. However, I can deduct prepaid interest for the 2 days the bank charged me (We closed on the 27th of februrary).

I guess I made a mistake in 2005 when I purchased a new home and deducted the prepaid escrow money to be used to pay real estate taxes. Guess it's been been more than 3 years so IRS can't audit me for that (it wasn't intentional, I just didn't know the tax laws at that time).
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Old 01-12-2010, 08:01 AM
 
3,295 posts, read 7,121,601 times
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Quote:
Originally Posted by aneftp View Post
Thanks.

Yes purchased home in 2009. I have a CPA. We tend to disagree on some parts of tax law occasional. My previous CPA unfortunately is deceased so I've only been working with this CPA for over a year.

Yes, I had around $3300 prepaid put into escrow (lender pays real estate taxes from escrow). So he told me I can't deduct prepaid real estate escrow money. However, I can deduct prepaid interest for the 2 days the bank charged me (We closed on the 27th of februrary).

I guess I made a mistake in 2005 when I purchased a new home and deducted the prepaid escrow money to be used to pay real estate taxes. Guess it's been been more than 3 years so IRS can't audit me for that (it wasn't intentional, I just didn't know the tax laws at that time).
While I am no CPA....

You can deduct your real estate taxes that you PAID for the year. Money held back in an escrow is not pre-paying your taxes.
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Old 01-12-2010, 08:39 AM
 
Location: Plano, Texas
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You should be able to deduct the taxes next year when they are paid to the state. Currently, you just have the money in a account waiting thus not deductible this year.
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Old 03-27-2011, 10:11 AM
 
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How about Line 107 from HUD1 for initial purchase in 09?
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