Many homeowners wonder whether or not their loan origination fees are tax-deductible. The answer will depend on how these fees are defined on the documents associated with your home purchase. As far as the IRS is concerned, loan origination fees can be used to increase your home’s cost, as long as these fees are identified separately on the closing documents associated with your new home.

By increasing your home’s cost, you can also decrease profit amount, which will then decrease your tax liability. However, it’s important to note that fees identified as points will never be tax deductible at any time.

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