IRS Publication 530 - Tax Information For Homeowners
What is 'IRS Publication 530 - Tax Information For Homeowners'
A document published by the Internal Revenue Service (IRS) that details how tax filers should treat costs relating to owning a home, including closing costs, mortgage interest, real estate taxes and repairs. IRS Publication 530 outlines which home-related items can and cannot be deducted on the tax return, and what items a taxpayer should keep track of in order to set the cost basis of the property. Some expenses, such as depreciation, closing costs, forfeited down payments and insurance, cannot be deducted.
BREAKING DOWN 'IRS Publication 530 - Tax Information For Homeowners'
Taxpayers must fill out Schedule A of Form 1040 in order to itemize home-related expenses. Itemizing deductions in this way means that the standard deduction cannot be claimed. To claim a mortgage interest credit Form 8396 (Mortgage Interest Credit) has to be used, and Form 5405 (First-Time Homebuyer Credit and Repayment of the Credit) for credits relating to the purchase of a new home.