If you are a landlord, most items on a settlement sheet have to be capitalized and amortized over the life of the mortgage, however:
- Interest expense from the time of settlement until your first mortgage payment is deductible.
- The amounts that you reimburse the seller for property taxes, utilities, homeowner’s association dues, etc. are deductible rental expenses to you.
- Likewise, any of these items that you have to pay because the seller did not are also deductible to you.
- Additionally, amounts paid in advance such as mortgage insurance and homeowner’s insurance are also deductible.
If you are purchasing a principal residence or a second home, then only mortgage interest and property taxes are deductible.
As always, this is only meant as a brief overview. If you feel that we can be of further assistance to you, please contact our office to set up an appointment.
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- Doherty & Associates Team