You can deduct closing costs for mortgage interest and deductible real estate taxes. Additionally, PMI premium is also expensed on Schedule E, line 9 (write in PMI on the dotted line). All other settlement fees and closing costs for buying the property are treated as additions to your basis in the property.
Fees related to obtaining a loan are capital expenses and should be amortized over the life of the loan. These expenses can include loan origination fees, abstract fees, and recording fees. You amortize them over the life of the mortgage on Schedule E, line 18.
For additional information, see IRS Pub 527, Residential Rental Property, and IRS Pub 535, Business Expenses.
[ Edited by NewKidInTown3 on Date 02/11/2006 ]
What are the service charges...please list the specific items.
I meant all the closing cost.
You can deduct closing costs for mortgage interest and deductible real estate taxes. Additionally, PMI premium is also expensed on Schedule E, line 9 (write in PMI on the dotted line). All other settlement fees and closing costs for buying the property are treated as additions to your basis in the property.
Fees related to obtaining a loan are capital expenses and should be amortized over the life of the loan. These expenses can include loan origination fees, abstract fees, and recording fees. You amortize them over the life of the mortgage on Schedule E, line 18.
For additional information, see IRS Pub 527, Residential Rental Property, and IRS Pub 535, Business Expenses.
[ Edited by NewKidInTown3 on Date 02/11/2006 ]