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            Department of the Treasury                        Contents
            Internal Revenue Service
                                                              What’s New   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
                                                              Reminders    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Publication 530
Cat. No. 15058K                                               Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                                                              What You Can and Can’t Deduct               . . . . . . . . . . . . . . .  3
                                                              State and Local Real Estate Taxes . . . . . . . . . . . .                  4
Tax                                                           Sales Taxes       . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
                                                              Home Mortgage Interest              . . . . . . . . . . . . . . . . . . .  6
Information for                                               Mortgage Interest Credit          . . . . . . . . . . . . . . . . . . .    12
                                                              Figuring the Credit         . . . . . . . . . . . . . . . . . . . . . .    12
Homeowners                                                    Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
                                                              Figuring Your Basis . . . . . . . . . . . . . . . . . . . . . .            14
For use in preparing                                          Adjusted Basis . . . . . . . . . . . . . . . . . . . . . . . . .           17
                                                              Keeping Records       . . . . . . . . . . . . . . . . . . . . . . . . .    17
2023 Returns
                                                              How To Get Tax Help       . . . . . . . . . . . . . . . . . . . . . . .    20
                                                              Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

                                                              What’s New
                                                              Residential clean energy credit.                The residential clean 
                                                              energy credit added a credit for qualified battery storage 
                                                              technology. Battery storage technology costs are allowed 
                                                              for  the  residential  clean  energy  credit  for  expenses  paid 
                                                              after December 31, 2022.
                                                              Biomass fuel property costs are no longer allowed for 
                                                              the  residential  clean  energy  credit  for  property  placed  in 
                                                              service after December 31, 2022. See the Instructions for 
                                                              Form 5695, Residential Energy Credits, for more informa-
                                                              tion.
                                                              Energy  efficient  home  improvement  credit.                     The  en-
                                                              ergy efficient home improvement credit is now divided into 
                                                              two sections to differentiate between qualified energy effi-
                                                              ciency improvements and residential energy property ex-
                                                              penditures. There is no lifetime limit on the amount of the 
                                                              credit. See the Instructions for Form 5695 for more infor-
                                                              mation.

                                                              Reminders
                                                              Future  developments.         For  the  latest  information  about 
                                                              developments  related  to  Pub.  530,  such  as  legislation 
                                                              enacted after it was published, go to IRS.gov/Pub530.
                                                              Residential energy efficient property credit.                     The resi-
                                                              dential energy efficient property credit is now the residen-
                                                              tial clean energy credit. The credit rate for property placed 
                                                              in service in 2022 through 2032 is 30%.
                                                              Energy efficient home improvement credit.                         The non-
Get forms and other information faster and easier at:
• IRS.gov (English)         • IRS.gov/Korean (한국어)            business energy property credit is now the energy efficient 
• IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский)       home improvement credit. The credit is extended to prop-
• IRS.gov/Chinese (中文)      • IRS.gov/Vietnamese (Tiếng Việt) erty placed in service after December 31, 2032.

Jan 25, 2024

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Mortgage insurance premiums. The itemized deduc- See State and Local Real Estate Taxes and Home
tion for mortgage premiums has expired. The deduction Mortgage Interest, later, to determine whether you meet
doesn’t exist for premiums paid after December 31, 2021. the rules to deduct all of the mortgage interest on your
loan and all of the real estate taxes on your main home.
Home Affordable Modification Program (HAMP). If
For more details about the HAF program, see Homeowner
you benefit from Pay-for-Performance Success Payments,
Assistance Fund at Treasury.gov/haf. If you received HAF
the payments aren’t taxable under HAMP.
funds from an Indian Tribal Government or an Alaska Na-
Repayment of first-time homebuyer credit. Generally, tive Corporation and want more details about the HAF pro-
you must repay any credit you claimed for a home you gram, see frequently asked questions (FAQs) at IRS.gov/
bought if you bought the home in 2008. See Form 5405 ITGANCFAQs.
and its instructions for details and for exceptions to the re-
See State and Local Real Estate Taxes and Home
payment rule.
Mortgage Interest, later, to determine whether you
Home equity loan interest. No matter when the indebt- CAUTION! meet the rules to deduct all of the mortgage inter-
edness was incurred, for tax years beginning in 2018 est on your loan and all of the real estate taxes on your
through 2025, you cannot deduct the interest from a loan main home.
secured by your home to the extent the loan proceeds
weren't used to buy, build, or substantially improve your Extended tax benefit. Certain tax benefits, including the
home. following, that were set to expire have been extended.
Homeowner Assistance Fund. The Homeowner Assis- • The nonbusiness energy property credit has changed
tance Fund program (HAF) was established to provide fi- to the energy efficient home improvement credit. The
nancial assistance to eligible homeowners for purposes of credit is extended to property placed in service
paying certain expenses related to their principal resi- through December 31, 2032.
dence to prevent mortgage delinquencies, defaults, fore-
• The exclusion from income of discharges of qualified
closures, loss of utilities or home energy services, and
principal residence indebtedness has been extended
also displacements of homeowners experiencing financial
through 2026.
hardship after January 21, 2020. If you are a homeowner
who received assistance under the HAF, the payments Residential energy credits. You may be able to take a
from the HAF program are not considered income to you credit if you made energy saving improvements to your
and you cannot take a deduction or credit for expenditures home located in the United States in 2023. See the In-
paid from the HAF program. structions for Form 5695, Residential Energy Credits, for
Rev. Proc. 2021-47 provides an optional method for more information.
certain homeowners who itemize their deductions to de- Mortgage debt forgiveness. You can exclude from
termine the amount you can deduct for home mortgage in- gross income any discharges of qualified principal resi-
terest and state and local real property taxes if you paid dence indebtedness made after 2006 and in most cases
the mortgage servicer with your own funds but also re- before 2026. You must reduce the basis of your principal
ceived financial assistance from the HAF program descri- residence (but not below zero) by the amount you exclude.
bed in Rev. Proc. 2021-47. Please note, though Rev. Proc. See Discharges of qualified principal residence indebted-
2021-47 provides for the possible deduction of home ness, later, and Form 982, Reduction of Tax Attributes
mortgage insurance premiums, you cannot deduct any Due to Discharge of Indebtedness (and Section 1082 Ba-
home mortgage insurance premiums you paid after De- sis Adjustment), for more information.
cember 31, 2021. For more details about the HAF pro-
gram, see Homeowner Assistance Fund. You may use the Photographs of missing children. The IRS is a proud
optional method if you meet the following two require- partner with the National Center for Missing & Exploited
ments. Children® (NCMEC). Photographs of missing children se-
lected by the Center may appear in this publication on pa-
1. You paid a portion of the mortgage interest or state ges that would otherwise be blank. You can help bring
and local real property taxes from your own sources these children home by looking at the photographs and
(that is, out-of-pocket payments not subsidized by any calling 1-800-THE-LOST (1-800-843-5678) if you recog-
governmental financial assistance programs). nize a child.
2. You meet the rules to deduct all of the mortgage inter-
est on your loan and all of the real estate taxes on
your main home. Introduction
The optional method allows you to deduct the mort- This publication provides tax information for homeowners.
gage interest and state and local real property taxes re- Your home may be a house, condominium, cooperative
ported on Form 1098, Mortgage Interest Statement, but apartment, mobile home, houseboat, or house trailer that
only up to the amount you paid from your own sources to contains sleeping space and toilet and cooking facilities.
the mortgage servicer during the tax year. You are not re- This publication explains how you treat items such as
quired to use this optional method to figure your deduction settlement and closing costs, real estate taxes, sales
for mortgage interest and state and local real property taxes, home mortgage interest, and repairs.
taxes on your main home.

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The following topics are explained. 936 936 Home Mortgage Interest Deduction

• What you can and can’t deduct on your tax return. Form (and Instructions)
• The tax credit you can claim if you received a mort- Schedule A (Form 1040) Schedule A (Form 1040) Itemized Deductions
gage credit certificate when you bought your home.
5405
• Why you should keep track of adjustments to the basis 5405 Repayment of the First-Time Homebuyer
of your home. (Your home's basis is generally what it Credit
cost; adjustments include the cost of any improve- 5695 5695 Residential Energy Credits
ments you might make.)
8396 8396 Mortgage Interest Credit
• What records you should keep as proof of the basis
and adjusted basis. 982 982 Reduction of Tax Attributes Due to Discharge of
Indebtedness (and Section 1082 Basis
Comments and suggestions. We welcome your com- Adjustment)
ments about this publication and suggestions for future
editions. See How To Get Tax Help, near the end of this publication,
You can send us comments through IRS.gov/ for information about getting publications and forms.
FormComments. Or, you can write to the Internal Revenue
Service, Tax Forms and Publications, 1111 Constitution
Ave. NW, IR-6526, Washington, DC 20224. What You Can and Can’t
Although we can’t respond individually to each com-
ment received, we do appreciate your feedback and will Deduct
consider your comments and suggestions as we revise
our tax forms, instructions, and publications. Don’t send To deduct expenses of owning a home, you must file Form
tax questions, tax returns, or payments to the above ad- 1040, U.S. Individual Income Tax Return, or Form
dress. 1040-SR, U.S. Income Tax Return for Seniors, and itemize
your deductions on Schedule A (Form 1040). If you item-
Getting answers to your tax questions. If you have ize, you can’t take the standard deduction.
a tax question not answered by this publication or the How
To Get Tax Help section at the end of this publication, go This section explains what expenses you can deduct as
to the IRS Interactive Tax Assistant page at IRS.gov/ a homeowner. It also points out expenses that you can’t
Help/ITA where you can find topics by using the search deduct. There are three primary discussions: state and lo-
feature or viewing the categories listed. cal real estate taxes, sales taxes, and home mortgage in-
terest.
Getting tax forms, instructions, and publications.
Go to IRS.gov/Forms to download current and prior-year Generally, your real estate taxes and home mortgage
forms, instructions, and publications. interest are included in your house payment.

Ordering tax forms, instructions, and publications. Your house payment. If you took out a mortgage (loan)
Go to IRS.gov/OrderForms to order current forms, instruc- to finance the purchase of your home, you probably have
tions, and publications; call 800-829-3676 to order to make monthly house payments. Your house payment
prior-year forms and instructions. The IRS will process may include several costs of owning a home. The only
your order for forms and publications as soon as possible. costs you can deduct are state and local real estate taxes
Don’t resubmit requests you’ve already sent us. You can actually paid to the taxing authority and interest that quali-
get forms and publications faster online. fies as home mortgage interest.These are discussed in
more detail later.
Useful Items Some nondeductible expenses that may be included in
You may want to see: your house payment include:
Publication • Fire or homeowner's insurance premiums,
4681 4681 Canceled Debts, Foreclosures, • Mortgage insurance premiums, and
Repossessions, and Abandonments • The amount applied to reduce the principal of the
mortgage.
523 523 Selling Your Home
525 525 Taxable and Nontaxable Income Minister's or military housing allowance. If you are a
minister or a member of the uniformed services and re-
527 527 Residential Rental Property ceive a housing allowance that isn’t taxable, you can still
547 547 Casualties, Disasters, and Thefts deduct your real estate taxes and your home mortgage in-
terest. You don’t have to reduce your deductions by your
551 551 Basis of Assets nontaxable allowance. For more information, see Pub.
517, Social Security and Other Information for Members of
555 555 Community Property
the Clergy and Religious Workers, and Pub. 3, Armed
587 587 Business Use of Your Home Forces' Tax Guide.

Publication 530 (2023) 3

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Nondeductible payments. You can’t deduct any of the Example. You bought your home on September 1. The
following items. property tax year (the period to which the tax relates) in
• Insurance, including fire and comprehensive cover- your area is the calendar year. The tax for the year was
age, and title insurance. $730 and was due and paid by the seller on August 15.
You owned your new home during the property tax year
• Wages you pay for domestic help. for 122 days (September 1 to December 31, including
• Depreciation. your date of purchase). You figure your deduction for real
estate taxes on your home as follows.
• The cost of utilities, such as gas, electricity, or water.
1. Enter the total real estate taxes for the real property
• Most settlement costs. See Settlement or closing tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . $730
costs under Cost as Basis, later, for more information. 2. Enter the number of days in the property tax year that
• Forfeited deposits, down payments, or earnest money. you owned the property . . . . . . . . . . . . . . . . . . 122
3. Divide line 2 by 365 . . . . . . . . . . . . . . . . . . . . 0.3342
• Internet or wifi system or service. 4. Multiply line 1 by line 3. This is your deduction. Enter
it on Schedule A (Form 1040), line 5b. . . . . . . . . . $244
• Homeowners association fees, condominium associa-
tion fees, or common charges. You can deduct $244 on your return for the year if you
• Repairs to home. itemize your deductions. You are considered to have paid
this amount and can deduct it on your return even if, under
the contract, you didn’t have to reimburse the seller.
State and Local Real Estate Taxes
Delinquent taxes. Delinquent taxes are unpaid taxes
Most state and local governments charge an annual tax that were imposed on the seller for an earlier tax year. If
on the value of real property. This is called a real estate you agree to pay delinquent taxes when you buy your
tax. You can deduct the tax if it is assessed uniformly at a home, you can’t deduct them. You treat them as part of the
like rate on all real property throughout the community. cost of your home. See Real estate taxes, later, under Ba-
The proceeds must be for general community or govern- sis.
mental purposes and not be a payment for a special privi-
lege granted or special service rendered to you. Escrow accounts. Many monthly house payments in-
clude an amount placed in escrow (put in the care of a
The deduction for state and local taxes, including
third party) for real estate taxes. You may not be able to
! real estate taxes, is limited to $10,000 ($5,000 if deduct the total you pay into the escrow account. You can
CAUTION married filing separately). See the Instructions for
deduct only the real estate taxes that the lender actually
Schedule A (Form 1040) for more information.
paid from escrow to the taxing authority. Your real estate
tax bill will show this amount.
Deductible Real Estate Taxes
Refund or rebate of real estate taxes. If you receive a
You can deduct real estate taxes imposed on you. You refund or rebate of real estate taxes this year for amounts
must have paid them either at settlement or closing, or to you paid this year, you must reduce your real estate tax
a taxing authority (either directly or through an escrow ac- deduction by the amount refunded to you. If the refund or
count) during the year. If you own a cooperative apart- rebate was for real estate taxes paid for a prior year, you
ment, see Special Rules for Cooperatives, later. may have to include some or all of the refund in your in-
come. For more information, see Recoveries in Pub. 525.
Where to deduct real estate taxes. Enter the amount of
your deductible state and local real estate taxes on Items You Can’t Deduct as Real Estate Taxes
Schedule A (Form 1040), line 5b.
The following items aren’t deductible as real estate taxes.
Real estate taxes paid at settlement or closing. Real
estate taxes are generally divided so that you and the Charges for services. An itemized charge for services
seller each pay taxes for the part of the property tax year to specific property or people isn’t a tax, even if the charge
you owned the home. Your share of these taxes is deducti- is paid to the taxing authority. You can’t deduct the charge
ble if you itemize your deductions. as a real estate tax if it is:
Division of real estate taxes. For federal income tax • A unit fee for the delivery of a service (such as a $5
purposes, the seller is treated as paying the property fee charged for every 1,000 gallons of water you use),
taxes up to, but not including, the date of sale. You (the
• A periodic charge for a residential service (such as a
buyer) are treated as paying the taxes beginning with the
$20 per month or $240 annual fee charged to each
date of sale. This applies regardless of the lien dates un-
homeowner for trash collection), or
der local law. Generally, this information is included on the
settlement statement you get at closing. • A flat fee charged for a single service provided by your
You and the seller each are considered to have paid local government (such as a $30 charge for mowing
your own share of the taxes, even if one or the other paid your lawn because it had grown higher than permitted
the entire amount. You each can deduct your own share, if under a local ordinance).
you itemize deductions, for the year the property is sold.

4 Publication 530 (2023)

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You must look at your real estate tax bill to decide 3. No stockholder can receive any distribution out of
! if any nondeductible itemized charges, such as capital, except on a partial or complete liquidation of
CAUTION those listed above, are included in the bill. If your the corporation.
taxing authority (or lender) doesn’t furnish you a copy of
4. At least one of the following.
your real estate tax bill, ask for it. Contact the taxing au-
thority if you need additional information about a specific a. At least 80% of the corporation's gross income for
charge on your real estate tax bill. the tax year was paid by the tenant-stockholders.
For this purpose, gross income means all income
Assessments for local benefits. You can’t deduct received during the entire tax year, including any
amounts you pay for local benefits that tend to increase received before the corporation changed to coop-
the value of your property. Local benefits include the con- erative ownership.
struction of streets, sidewalks, or water and sewer sys- b. At least 80% of the total square footage of the cor-
tems. You must add these amounts to the basis of your poration's property must be available for use by
property. the tenant-stockholders during the entire tax year.
You can, however, deduct assessments (or taxes) for
local benefits if they are for maintenance, repair, or inter- c. At least 90% or more of the expenditures paid or
est charges related to those benefits. An example is a incurred by the corporation were used for the ac-
charge to repair an existing sidewalk and any interest in- quisition, construction, management, mainte-
cluded in that charge. nance, or care of the corporation’s property for the
If only a part of the assessment is for maintenance, re- benefit of the tenant-shareholders during the en-
pair, or interest charges, you must be able to show the tire tax year.
amount of that part to claim the deduction. If you can’t
show what part of the assessment is for maintenance, re- Tenant-stockholders. A tenant-stockholder can be any
pair, or interest charges, you can’t deduct any of it. entity (such as a company or corporation, trust, estate,
An assessment for a local benefit may be listed as an partnership, or association) as well as an individual. The
item in your real estate tax bill. If so, use the rules in this tenant-stockholder doesn't have to live in any of the coop-
section to find how much of it, if any, you can deduct. erative's dwelling units. The units that the tenant-stock-
holder has the right to occupy can be rented to others.
Transfer taxes (or stamp taxes). You can't deduct
transfer taxes and similar taxes and charges on the sale of Deductible taxes. You figure your share of real estate
a personal home. If you are the buyer and you pay them, taxes in the following way.
include them in the cost basis of the property. If you are 1. Divide the number of your shares of stock by the total
the seller and you pay them, they are expenses of the sale number of shares outstanding, including any shares
and reduce the amount realized on the sale. held by the corporation.
Homeowners’ association assessments. You can't de- 2. Multiply the corporation's deductible real estate taxes
duct these assessments because the homeowners’ asso- by the number you figured in (1). This is your share of
ciation, rather than a state or local government, imposes the real estate taxes.
them.
Generally, the corporation will tell you your share of its
Foreign taxes you paid on real estate. You can't de- real estate tax. This is the amount you can deduct if it rea-
duct foreign taxes you paid on real estate. sonably reflects the cost of real estate taxes for your
dwelling unit.
Special Rules for Cooperatives Refund of real estate taxes. If the corporation re-
ceives a refund of real estate taxes it paid in an earlier
If you own a cooperative apartment, some special rules year, it must reduce the amount of real estate taxes paid
apply to you, though you generally receive the same tax this year when it allocates the tax expense to you. Your
treatment as other homeowners. As an owner of a cooper- deduction for real estate taxes the corporation paid this
ative apartment, you own shares of stock in a corporation year is reduced by your share of the refund the corpora-
that owns or leases housing facilities. You can deduct your tion received.
share of the corporation's deductible real estate taxes if
the cooperative housing corporation meets the following
conditions. Sales Taxes

1. The corporation has only one class of stock outstand- Generally, you can elect to deduct state and local general
ing. sales taxes instead of state and local income taxes as an
itemized deduction on Schedule A (Form 1040). You must
2. Each stockholder, solely because of ownership of the check the box on Schedule A (Form 1040), line 5a, if you
stock, can live in a house, apartment, or house trailer elect this option. Deductible sales taxes may include sales
owned or leased by the corporation. taxes paid on your home (including mobile and prefabrica-
ted), or home building materials if the tax rate was the
same as the general sales tax rate. For information on

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figuring your deduction, see the Instructions for Sched- that debt. If you also have qualifying debt subject to the $1
ule A (Form 1040). million ($500,000 if you are married filing separately) limi-
tation discussed under Limit on loans taken out on or be-
The deduction for state and local taxes, including
fore December 15, 2017, earlier, the $750,000 limit for
! general sales taxes, if elected instead of income debt taken out after December 15, 2017, is reduced by the
CAUTION taxes, is limited to $10,000 ($5,000 if married fil-
amount of your qualifying debt subject to the $1 million
ing separately). See the Instructions for Schedule A (Form
limit. An exception exists for certain loans taken out after
1040) for more information.
December 15, 2017, but before April 1, 2018. If the excep-
If you elect to deduct the sales taxes paid on your tion applies, your loan may be treated in the same manner
as a loan taken out on or before December 15, 2017. See
! home, or home building materials, you can't in- Pub. 936 for more information about this exception.
CAUTION clude them as part of your cost basis in the home.
See Pub. 936 to figure your deduction if you have loans
taken out after October 13, 1987, that exceed $750,000
Home Mortgage Interest ($375,000 or less if you are married filing separately).
Limit when loans exceed the fair market value of
This section of the publication gives you basic information
the home. If the total amount of all mortgages is more
about home mortgage interest, including information on
than the fair market value of the home, see Pub. 936 to fig-
interest paid at settlement, points, and Form 1098.
ure your deduction.
Most home buyers take out a mortgage (loan) to buy
their home. They then make monthly payments to either Refund of home mortgage interest. If you receive a re-
the mortgage holder or someone collecting the payments fund of home mortgage interest that you deducted in an
for the mortgage holder. earlier year and that reduced your tax, you must generally
include the refund in income in the year you receive it. For
Usually, you can deduct the entire part of your payment more information, see Recoveries in Pub. 525. The
that is for mortgage interest for acquisition debt (or debt amount of the refund will usually be shown on the mort-
that qualifies as acquisition debt) if you itemize your de- gage interest statement you receive from your mortgage
ductions on Schedule A (Form 1040). See lender. See Mortgage Interest Statement, later.
Home Acquisition Debt for more information.
Deductible Mortgage Interest
Limits on home mortgage interest. Your deduction for
home mortgage interest is subject to a number of limits. If
To be deductible, the interest you pay must be on a loan
one or more of the following limits apply, see Pub. 936 to
secured by your main home or a second home, regardless
figure your deduction. Also see Pub. 936 if you later refi-
of how the loan is labeled. The loan can be a first or sec-
nance your mortgage or buy a second home.
ond mortgage, a home improvement loan, a home equity
Limit for loan proceeds not used to buy, build, or loan, or a refinanced mortgage.
substantially improve your home. You can only de-
Interest paid on home mortgage proceeds is only
duct home mortgage interest to the extent that the loan
deductible to the extent the loan proceeds were
proceeds from your home mortgage are used to buy, CAUTION!
used to buy, build, or substantially improve your
build, or substantially improve the home securing the loan.
home.
The only exception to this limit is for loans taken out on or
before October 13, 1987; the loan proceeds for these
loans are treated as having been used to buy, build, or Prepaid interest. If you pay interest in advance for a pe-
substantially improve the home. See Pub. 936 for more in- riod that goes beyond the end of the tax year, you must
formation about loans taken out on or before October 13, spread this interest over the tax years to which it applies.
1987. Generally, you can deduct in each year only the interest
that qualifies as home mortgage interest for that year. An
Limit on loans taken out on or before December exception (discussed later) applies to points.
15, 2017. For qualifying debt taken out on or before De-
cember 15, 2017, you can only deduct home mortgage in- Late payment charge on mortgage payment. You can
terest on up to $1 million ($500,000 if you are married fil- deduct as home mortgage interest a late payment charge
ing separately) of that debt. The only exception is for loans if it wasn't for a specific service in connection with your
taken out on or before October 13, 1987; see Pub. 936 for mortgage loan.
more information about loans taken out on or before Octo-
ber 13, 1987. Mortgage prepayment penalty. If you pay off your home
See Pub. 936 to figure your deduction if you have loans mortgage early, you may have to pay a penalty. You can
taken out on or before December 15, 2017, that exceed $1 deduct that penalty as home mortgage interest, provided
million ($500,000 if you are married filing separately). the penalty isn't for a specific service performed or cost in-
curred in connection with your mortgage loan.
Limit on loans taken out after December 15, 2017.
For qualifying debt taken out after December 15, 2017, Ground rent. In some states (such as Maryland), you
you can only deduct home mortgage interest on up to may buy your home subject to a ground rent. A ground
$750,000 ($375,000 if you are married filing separately) of rent is an obligation you assume to pay a fixed amount per

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year on the property. Under this arrangement, you are You can deduct the interest that you pay at settlement if
leasing (rather than buying) the land on which your home you itemize your deductions on Schedule A (Form 1040).
is located. This amount should be included in the mortgage interest
statement provided by your lender. See the discussion un-
Redeemable ground rents. If you make annual or pe-
der Mortgage Interest Statement, later. Also, if you pay in-
riodic rental payments on a redeemable ground rent, you
terest in advance, see Prepaid interest, earlier, and Points
can deduct the payments as mortgage interest. The
next.
ground rent is a redeemable ground rent only if all of the
following are true.
Points
• Your lease, including renewal periods, is for more than
15 years. The term “points” is used to describe certain charges paid,
or treated as paid, by a borrower to obtain a home mort-
• You can freely assign the lease.
gage. Points may also be called loan origination fees,
• You have a present or future right (under state or local maximum loan charges, loan discount, or discount points.
law) to end the lease and buy the lessor's entire inter-
est in the land by paying a specified amount. A borrower is treated as paying any points that a home
seller pays for the borrower's mortgage. See Points paid
• The lessor's interest in the land is primarily a security
by the seller, later.
interest to protect the rental payments to which the
lessor is entitled. General rule. You can't deduct the full amount of points
Payments made to end the lease and buy the lessor's in the year paid. They are prepaid interest, so you must
entire interest in the land aren't redeemable ground rents. generally deduct them over the life (term) of the mortgage.
You can't deduct them.
Exception. You can deduct the full amount of points in
Nonredeemable ground rents. Payments on a non- the year paid if you meet all the following tests.
redeemable ground rent aren't mortgage interest. You can
1. Your loan is secured by your main home. (Generally,
deduct them as rent only if they are a business expense or
your main home is the one you live in most of the
if they are for rental property.
time.)
Cooperative apartment. You can usually treat the inter- 2. Paying points is an established business practice in
est on a loan you took out to buy stock in a cooperative the area where the loan was made.
housing corporation as home mortgage interest if you own
a cooperative apartment, and the cooperative housing 3. The points paid weren't more than the points gener-
corporation meets the conditions described earlier under ally charged in that area.
Special Rules for Cooperatives. In addition, you can treat 4. You use the cash method of accounting. This means
as home mortgage interest your share of the corporation's you report income in the year you receive it and de-
deductible mortgage interest. Figure your share of mort- duct expenses in the year you pay them. Most individ-
gage interest the same way that is shown for figuring your uals use this method.
share of real estate taxes in the Example under Division of
real estate taxes, earlier. For more information on cooper- 5. The points weren't paid in place of amounts that are
atives, see Special Rule for Tenant-Stockholders in Coop- ordinarily stated separately on the settlement state-
erative Housing Corporations in Pub. 936. ment, such as appraisal fees, inspection fees, title
fees, attorney fees, and property taxes.
Refund of cooperative's mortgage interest. You
must reduce your mortgage interest deduction by your 6. The funds you provided at or before closing, plus any
share of any cash portion of a patronage dividend that the points the seller paid, were at least as much as the
cooperative receives. The patronage dividend is a partial points charged. The funds you provided aren't re-
refund to the cooperative housing corporation of mortgage quired to have been applied to the points. They can
interest it paid in a prior year. include a down payment, an escrow deposit, earnest
If you receive a Form 1098 from the cooperative hous- money, and other funds you paid at or before closing
ing corporation, the form should show only the amount for any purpose. You can't have borrowed these
you can deduct. funds.
7. You use your loan to buy or build your main home.
SBA disaster home loans. Interest paid on disaster
home loans from the Small Business Administration (SBA) 8. The points were figured as a percentage of the princi-
is deductible as mortgage interest if the requirements dis- pal amount of the mortgage.
cussed earlier under Home Mortgage Interest are met.
9. The amount is clearly shown on the settlement state-
ment (such as the Uniform Settlement Statement,
Mortgage Interest Paid at Settlement Form HUD-1) as points charged for the mortgage.
The points may be shown as paid from either your
One item that normally appears on a settlement or closing
funds or the seller's.
statement is home mortgage interest.

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Note. If you meet all of the tests listed above and you home and you meet the first six tests listed earlier, you can
itemize your deductions in the year you get the loan, you fully deduct the part of the points related to the improve-
can either deduct the full amount of points in the year paid ment in the year you paid them with your own funds. You
or deduct them over the life of the loan, beginning in the can deduct the rest of the points over the life of the loan.
year you get the loan. If you do not itemize your deduc-
Points not fully deductible in year paid. If you don’t
tions in the year you get the loan, you can spread the
qualify under the exception to deduct the full amount of
points over the life of the loan and deduct the appropriate
points in the year paid (or choose not to do so), see Points
amount in each future year, if any, when you do itemize
in Pub. 936 for the rules on when and how much you can
your deductions.
deduct.
Home improvement loan. You can also fully deduct
Figure A. You can use Figure A as a quick guide to
in the year paid points paid on a loan to substantially im-
see whether your points are fully deductible in the year
prove your main home if you meet the first six tests listed
paid.
earlier.
Refinanced loan. If you use part of the refinanced
mortgage proceeds to substantially improve your main

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Figure A. Are My Points Fully Deductible This Year?

                                               Start Here:
                                                                                  No
             Is the loan secured by your main home?

                                               Yes
             Is the payment of points an established business practice in your    No
             area?
                                               Yes
             Were the points paid more than the amount generally charged in       Yes
             your area?
                                               No
                                                                                  No
             Do you use the cash method of accounting?

                                               Yes

             Were the points paid in place of amounts that ordinarily are         Yes
             separately stated on the settlement sheet?

                                               No

             Were the funds you provided (other than those you borrowed from 
             your lender or mortgage broker), plus any points the seller paid, at No
             least as much as the points charged?* 

                                               Yes
          Yes
             Did you take out the loan to substantially improve your main home?

                                               No
                                                                                  No
             Did you take out the loan to buy or build your main home? 

                                               Yes
             Were the points computed as a percentage of the principal amount     No
             of the mortgage?
                                               Yes
             Is the amount paid clearly shown as points on the settlement         No
             statement? 
                                               Yes
             You can fully deduct the points this year on Schedule A (Form 1040).   You cannot fully deduct the points this year. 
                                                                                    See the discussion on Points, earlier.

* The funds you provided are not required to have been applied to the points. They can include a down payment, an escrow deposit, earnest  money, and other funds 
you paid at or before closing for any purpose. 

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Amounts charged for services. Amounts charged by You must spread any additional points over the life of the
the lender for specific services connected to the loan mortgage.
aren't interest. Examples of these charges are:
Mortgage ending early. If you spread your deduction for
• Appraisal fees, points over the life of the mortgage, you can deduct any
• Notary fees, remaining balance in the year the mortgage ends. A mort-
gage may end early due to a prepayment, refinancing,
• Preparation costs for the mortgage note or deed of
foreclosure, or similar event.
trust, and
• Mortgage insurance premiums. Example. Dan paid $3,000 in points in 2015 that he
had to spread out over the 15-year life of the mortgage.
You can't deduct these amounts as points either in the
He had deducted $1,600 of these points through 2022.
year paid or over the life of the mortgage. For information
Dan prepaid his mortgage in full in 2023. He can de-
about the tax treatment of these amounts and other settle-
duct the remaining $1,400 of points in 2023.
ment fees and closing costs, see Basis, later.
Exception. If you refinance the mortgage with the
Points paid by the seller. The term “points” includes same lender, you can't deduct any remaining points for the
loan placement fees that the seller pays to the lender to year. Instead, deduct them over the term of the new loan.
arrange financing for the buyer.
Form 1098. The mortgage interest statement you receive
Treatment by seller. The seller can't deduct these
should show not only the total interest paid during the
fees as interest. However, they are a selling expense that
year, but also your deductible points paid during the year.
reduces the seller's amount realized. See Pub. 523 for
See Mortgage Interest Statement, later.
more information.
Treatment by buyer. The buyer treats seller-paid Where To Deduct Home Mortgage Interest
points as if the buyer had paid them. If all the tests listed
earlier under Exception are met, the buyer can deduct the Enter on Schedule A (Form 1040), line 8a, the home mort-
points in the year paid. If any of those tests aren't met, the gage interest and points reported to you on Form 1098
buyer must deduct the points over the life of the loan. (discussed next). If you didn't receive a Form 1098, enter
The buyer must also reduce the basis of the home by your deductible interest on line 8b, and any deductible
the amount of the seller-paid points. For more information points on line 8c. See Table 1 for a summary of where to
about the basis of your home, see Basis, later. deduct home mortgage interest and state and local real
estate taxes.
Funds provided are less than points. If you meet all
the tests listed earlier under Exception except that the If you paid home mortgage interest to the person from
funds you provided were less than the points charged to whom you bought your home, show that person's name,
you (test 6), you can deduct the points in the year paid up address, and social security number (SSN) or employer
to the amount of funds you provided. In addition, you can identification number (EIN) on the dotted lines next to
deduct any points paid by the seller. line 8b. The seller must give you this number and you
must give the seller your SSN. Form W-9, Request for
Example 1. When you took out a $100,000 mortgage Taxpayer Identification Number and Certification, can be
loan to buy your home in December, you were charged used for this purpose. Failure to meet either of these re-
one point ($1,000). You meet all the tests for deducting quirements may result in a $50 penalty for each failure.
points in the year paid (see Exception, earlier), except the
only funds you provided were a $750 down payment. Of
the $1,000 you were charged for points, you can deduct
$750 in the year paid. You spread the remaining $250 over
the life of the mortgage.

Example 2. The facts are the same as in Example 1,
except that the person who sold you your home also paid
one point ($1,000) to help you get your mortgage. In the
year paid, you can deduct $1,750 ($750 of the amount you
were charged plus the $1,000 paid by the seller). You
spread the remaining $250 over the life of the mortgage.
You must reduce the basis of your home by the $1,000
paid by the seller.

Excess points. If you meet all the tests under Exception,
earlier, except that the points paid were more than are
generally charged in your area (test 3), you can deduct in
the year paid only the points that are generally charged.

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More than one borrower. If you and at least one other
Mortgage Interest Statement person (other than your spouse if you file a joint return)
were liable for and paid interest on a mortgage that was
If you paid $600 or more of mortgage interest (including for your home, and the other person received a Form 1098
certain points during the year) on any one mortgage to a showing the interest that was paid during the year, attach
mortgage holder in the course of that holder's trade or a statement to your paper return explaining this. Show
business, you should receive a Form 1098 or similar state- how much of the interest each of you paid, and give the
ment from the mortgage holder. The statement will show name and address of the person who received the form.
the total interest paid on your mortgage during the year. If Deduct your share of the interest on Schedule A (Form
you bought a main home during the year, it will also show 1040), line 8b, and enter “See attached” to the right of that
the deductible points you paid and any points you can de- line.
duct that were paid by the person who sold you your
home. See Points, earlier. Home Acquisition Debt

The interest you paid at settlement should be included Home acquisition debt is a mortgage you took out after
on the statement. If it isn't, add the interest from the settle- October 13, 1987, to buy, build, or substantially improve a
ment sheet that qualifies as home mortgage interest to the qualified home. It must also be secured by that home.
total shown on Form 1098 or similar statement. Put the to-
tal on Schedule A (Form 1040), line 8a, and attach a state- If the amount of your mortgage is more than the cost of
ment to your return explaining the difference. Enter “See the home plus the cost of any substantial improvements,
attached” to the right of line 8a. only the debt that is not more than the cost of the home
plus improvements qualifies as home acquisition debt.
A mortgage holder can be a financial institution, a gov-
ernmental unit, or a cooperative housing corporation. If a Home acquisition debt limit. The total amount you can
statement comes from a cooperative housing corporation, treat as home acquisition debt at any time on your home
it will generally show your share of interest. cannot be more than $1 million ($500,000 if married filing
separately). However, for tax years beginning after De-
Your mortgage interest statement for 2023 should be cember 31, 2017, and before January 1, 2026, there is a
provided or sent to you by January 31, 2024. If it is mailed, further limitation. If you purchased your home during this
you should allow adequate time to receive it before con- time, the total amount you can treat as home acquisition
tacting the mortgage holder. A copy of this form will also debt at any time on your home generally cannot be more
be sent to the IRS. than $750,000 ($375,000 if married filing separately).

Example. You bought a new home on May 3. You paid Discharges of qualified principal residence indebted-
no points on the purchase. During the year, you made ness. You can exclude from gross income any discharges
mortgage payments that included $4,480 deductible inter- of qualified principal residence indebtedness made after
est on your new home. The settlement sheet for the pur- 2006 and in most cases before 2026. You must reduce the
chase of the home included interest of $620 for 29 days in basis of your principal residence (but not below zero) by
May. The mortgage statement you receive from the lender the amount you exclude.
includes total interest of $5,100 ($4,480 + $620). You can
deduct the $5,100 if you itemize your deductions. Principal residence. Your principal residence is the
home where you ordinarily live most of the time. You can
Refund of overpaid interest. If you receive a refund of have only one principal residence at any one time.
mortgage interest you overpaid in a prior year, you will
Qualified principal residence indebtedness. This
generally receive a Form 1098 showing the refund in
indebtedness is a mortgage that you took out to buy, build,
box 4. Generally, you must include the refund in income in
or substantially improve your principal residence and that
the year you receive it. See Refund of home mortgage in-
is secured by that residence. If the amount of your original
terest, earlier, under Home Mortgage Interest.
mortgage is more than the cost of your principal residence

Table 1. Where To Deduct Interest and Taxes Paid on Your Home
See the text for information on what expenses are eligible.

IF you are eligible to deduct . . . THEN report the amount
on Schedule A (Form 1040) . . .
state and local real estate taxes line 5b.
home mortgage interest and points reported on Form 1098 line 8a.
home mortgage interest not reported on Form 1098 line 8b.
points not reported on Form 1098 line 8c.

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plus the cost of substantial improvements, qualified princi- You must contact the appropriate government
pal residence indebtedness can’t be more than the cost of TIP agency about getting an MCC before you get a
your principal residence plus improvements. mortgage and buy your home. Contact your state
Any debt secured by your principal residence that you or local housing finance agency for information about the
use to refinance qualified principal residence indebted- availability of MCCs in your area.
ness is qualified principal residence indebtedness up to
the amount of your old mortgage principal just before the How to claim the credit. To claim the credit, complete
refinancing. Additional debt incurred to substantially im- Form 8396 and attach it to your Form 1040, 1040-SR, or
prove your principal residence is also qualified principal 1040-NR. Include the credit in your total for Schedule 3
residence indebtedness. (Form 1040), line 6g.
Amount you can exclude. You can only exclude debt
Reducing your home mortgage interest deduction. If
discharged after 2006 and in most cases before 2026.
you itemize your deductions on Schedule A (Form 1040),
The most you can exclude is $750,000 ($375,000 if mar-
you must reduce your home mortgage interest deduction
ried filing separately). You can’t exclude any amount that
by the amount of the mortgage interest credit shown on
was discharged because of services performed for the
Form 8396, line 3. You must do this even if part of that
lender or on account of any other factor not directly related
amount is to be carried forward to 2023.
either to a decline in the value of your residence or to your
financial condition. Selling your home. If you purchase a home after 1990
Ordering rule. If only a part of a loan is qualified prin- using an MCC, and you sell that home within 9 years, you
cipal residence indebtedness, you can exclude only the may have to recapture (repay) all or part of the benefit you
amount of the discharge that is more than the amount of received from the MCC program. For additional informa-
the loan (immediately before the discharge) that is not tion, see Paying Back Credits and Subsidies in Pub. 523.
qualified principal residence indebtedness.
Figuring the Credit
Qualified Home
Figure your credit on Form 8396.
This means your main home or your second home. A
home includes a house, condominium, cooperative, mo- Mortgage not more than certified indebtedness. If
bile home, house trailer, boat, or similar property that has your mortgage loan amount is equal to (or smaller than)
sleeping, cooking, and toilet facilities. the certified indebtedness amount shown on your MCC,
enter on Form 8396, line 1, all the interest you paid on
Main home. You can have only one main home at any your mortgage during the year.
one time. This is the home where you ordinarily live most
of the time. Mortgage more than certified indebtedness. If your
mortgage loan amount is larger than the certified indebt-
Second home and other special situations. If you edness amount shown on your MCC, you can figure the
have a second home, use part of your home for other than credit on only part of the interest you paid. To find the
residential living (such as a home office), rent out part of amount to enter on line 1, multiply the total interest you
your home, or are having your home constructed, see paid during the year on your mortgage by the following
Qualified Home in Pub. 936. fraction.

Mortgage Larger than Certified
Mortgage Interest Credit Indebtedness
Certified indebtedness amount on your MCC
The mortgage interest credit is intended to help lower-in-
come individuals afford home ownership. If you qualify, Original amount of your mortgage
you can claim the credit on Form 8396 each year for part
of the home mortgage interest you pay. The fraction won’t change as long as you are entitled to
take the mortgage interest credit.
Who qualifies. You may be eligible for the credit if you
were issued a qualified Mortgage Credit Certificate (MCC) Example. Emily bought a home this year. Her mort-
from your state or local government. Generally, an MCC is gage loan is $125,000. The certified indebtedness
issued only in connection with a new mortgage for the pur- amount on her MCC is $100,000. She paid $7,500 inter-
chase of your main home. est this year. Emily figures the interest to enter on Form
8396, line 1, as follows:
The MCC will show the certificate credit rate you will
use to figure your credit. It will also show the certified in- $100,000
debtedness amount. Only the interest on that amount = 80% (0.80)
$125,000
qualifies for the credit. See Figuring the Credit, later.
$7,500 x 0.80 = $6,000

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Emily enters $6,000 on Form 8396, line 1. In each later Carryforward
year, she will figure her credit using only 80% of the inter-
est she pays for that year. If your allowable credit is reduced because of the limit
based on your tax, you can carry forward the unused por-
Limits tion of the credit to the next 3 years or until used, which-
ever comes first.
Two limits may apply to your credit.
Example. You receive a mortgage credit certificate
• A limit based on the credit rate.
from State X. This year, your regular tax liability is $1,100,
• A limit based on your tax. you owe no alternative minimum tax, and your mortgage
interest credit is $1,700. You claim no other credits. Your
Limit based on credit rate. If the certificate credit rate is unused mortgage interest credit for this year is $600
higher than 20%, the credit you are allowed can't be more ($1,700 − $1,100). You can carry forward this amount to
than $2,000. the next 3 years or until used, whichever comes first.

Limit based on tax. After applying the limit based on the Credit rate more than 20%. If you are subject to the
credit rate, your credit generally can't be more than your $2,000 limit because your certificate credit rate is more
tax liability. See the Credit Limit Worksheet in the Form than 20%, you can't carry forward any amount more than
8396 instructions to figure the limit based on tax. $2,000 (or your share of the $2,000 if you must divide the
credit).
Dividing the Credit
Example. In the earlier example under Dividing the
If two or more persons (other than a married couple filing a Credit, John and George used the entire $2,000 credit.
joint return) hold an interest in the home to which the MCC The excess
relates, the credit must be divided based on the interest
held by each person. John $1,350 − $1,200 = $150
George $900 − $800 = $100
Example. John and his brother, George, were issued
an MCC. They used it to get a mortgage on their main $150 for John ($1,350 − $1,200) and $100 for George
home. John has a 60% ownership interest in the home, ($900 − $800) can't be carried forward to future years, de-
and George has a 40% ownership interest in the home. spite the respective tax liabilities for John and George.
John paid $5,400 mortgage interest this year and George
paid $3,600.
Refinancing
The MCC shows a credit rate of 25% and a certified in-
debtedness amount of $130,000. The loan amount (mort-
If you refinance your original mortgage loan on which you
gage) on their home is $120,000. The credit is limited to
had been given an MCC, you must get a new MCC to be
$2,000 because the credit rate is more than 20%.
able to claim the credit on the new loan. The amount of
John figures the credit by multiplying the mortgage in-
credit you can claim on the new loan may change. Table 2
terest he paid this year ($5,400) by the certificate credit
summarizes how to figure your credit if you refinance your
rate (25%) for a total of $1,350. His credit is limited to
original mortgage loan.
$1,200 ($2,000 × 60% (0.60)).
George figures the credit by multiplying the mortgage
An issuer may reissue an MCC after you refinance your
interest he paid this year ($3,600) by the certificate credit
mortgage. If you didn't get a new MCC, you may want to
rate (25%) for a total of $900. His credit is limited to $800
contact the state or local housing finance agency that is-
($2,000 × 40% (0.40)).
sued your original MCC for information about whether you
can get a reissued MCC.

Table 2. Effect of Refinancing on Your Credit Keep for Your Records
IF you get a new (reissued) MCC and the amount of your new THEN the interest you claim on Form 8396, line 1, is...*
mortgage is...
smaller than or equal to the certified indebtedness amount on the new all the interest paid during the year on your new mortgage.
MCC
interest paid during the year on your new mortgage multiplied by the
larger than the certified indebtedness amount on the new MCC
following fraction.
Certified indebtedness
amount on your new MCC
Original amount of your
mortgage

* The credit using the new MCC can't be more than the credit using the old MCC. See New MCC can't increase your credit, later.

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Year of refinancing. In the year of refinancing, add the own your home. You must also keep records of the events
applicable amount of interest paid on the old mortgage that affect basis or adjusted basis. See Keeping Records,
and the applicable amount of interest paid on the new later.
mortgage, and enter the total on Form 8396, line 1.
If your new MCC has a credit rate different from the rate Figuring Your Basis
on the old MCC, you must attach a statement to Form
8396. The statement must show the calculation for lines 1, How you figure your basis depends on how you acquire
2, and 3 for the part of the year when the old MCC was in your home. Generally, if you buy or build your home, your
effect. It must show a separate calculation for the part of cost is your basis. If you receive your home as a gift, your
the year when the new MCC was in effect. Combine the basis is usually the same as the adjusted basis of the per-
amounts from both calculations for line 3, enter the total son who gave you the property. If you inherit your home
on line 3 of the form, and enter “See attached” on the dot- from a decedent, different rules apply depending on the
ted line next to line 2. date of the decedent's death. Each of these topics is dis-
New MCC can't increase your credit. The credit that cussed later.

you claim with your new MCC can't be more than the Property transferred from a spouse. If your home is
credit that you could have claimed with your old MCC. transferred to you from your spouse, or from your former
In most cases, the agency that issues your new MCC spouse as a result of a divorce, your basis is the same as
will make sure that it doesn't increase your credit. How- your spouse's (or former spouse's) adjusted basis just be-
ever, if either your old loan or your new loan has a variable fore the transfer. Pub. 504, Divorced or Separated Individ-
(adjustable) interest rate, you will need to check this your- uals, fully discusses transfers between spouses.
self. In that case, you will need to know the amount of the
credit you could have claimed using the old MCC.
Cost as Basis
There are two methods for figuring the credit you could
have claimed. Under one method, you figure the actual
The cost of your home, whether you purchased it or con-
credit that would have been allowed. This means you use
structed it, is the amount you paid for it, including any debt
the credit rate on the old MCC and the interest you would
you assumed.
have paid on the old loan.
If your old loan was a variable rate mortgage, you can
The cost of your home includes most settlement or
use another method to determine the credit that you could
closing costs you paid when you bought the home. If you
have claimed. Under this method, you figure the credit us-
built your home, your cost includes most closing costs
ing a payment schedule of a hypothetical self-amortizing
paid when you bought the land or settled on your mort-
mortgage with level payments projected to the final matur-
gage. See Settlement or closing costs, later.
ity date of the old mortgage. The interest rate of the hypo-
thetical mortgage is the annual percentage rate (APR) of If you elect to deduct the sales taxes on the pur-
the new mortgage for purposes of the Federal Truth in ! chase or construction of your home as an item-
Lending Act. The principal of the hypothetical mortgage is CAUTION ized deduction on Schedule A (Form 1040), you
the remaining outstanding balance of the certified mort- can't include the sales taxes as part of your cost basis in
gage indebtedness shown on the old MCC. the home.
You must choose one method and use it consis-
Purchase. The basis of a home you bought is the amount
CAUTION you claim the credit based on the new MCC.
! tently beginning with the first tax year for which you paid for it. This usually includes your down payment
and any debt you assumed. The basis of a cooperative
As part of your tax records, you should keep your apartment is the amount you paid for your shares in the
TIP old MCC and the schedule of payments for your corporation that owns or controls the property. This
old mortgage. amount includes any purchase commissions or other
costs of acquiring the shares.

Construction. If you contracted to have your home built
Basis on land that you own, your basis in the home is your basis
in the land plus the amount you paid to have the home
Basis is your starting point for figuring a gain or loss if you built. This includes the cost of labor and materials, the
later sell your home, or for figuring depreciation if you later amount you paid the contractor, any architect's fees, build-
use part of your home for business purposes or for rent. ing permit charges, utility meter and connection charges,
and legal fees that are directly connected with building
While you own your home, you may add certain items
your home. If you built all or part of your home yourself,
to your basis. You may subtract certain other items from
your basis is the total amount it cost you to build it. You
your basis. These items are called adjustments to basis
can't include in basis the value of your own labor or any
and are explained later under Adjusted Basis.
other labor for which you didn't pay.
It is important that you understand these terms when
you first acquire your home because you must keep track Real estate taxes. Real estate taxes are usually divided
of your basis and adjusted basis during the period you so that you and the seller each pay taxes for the part of the

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property tax year that each owned the home. See Real es- The following are some of the settlement fees and clos-
tate taxes paid at settlement or closing under State and ing costs that you can include in the original basis of your
Local Real Estate Taxes, earlier, to figure the real estate home.
taxes you paid or are considered to have paid.
• Abstract fees (abstract of title fees).
If you pay any part of the seller's share of the real estate
taxes (the taxes up to the date of sale), and the seller • Charges for installing utility services.
didn't reimburse you, add those taxes to your basis in the • Legal fees (including fees for the title search and prep-
home. You can't deduct them as taxes paid. aration of the sales contract and deed).
If the seller paid any of your share of the real estate
taxes (the taxes beginning with the date of sale), you can • Recording fees.
still deduct those taxes. Don’t include those taxes in your • Surveys.
basis. If you didn't reimburse the seller, you must reduce
your basis by the amount of those taxes. • Transfer or stamp taxes.
• Owner's title insurance.
Example 1. You bought your home on September 1,
2023. The property tax year in your area is the calendar • Any amount the seller owes that you agree to pay,
year, and the tax is due on August 15. The real estate such as back taxes or interest, recording or mortgage
taxes on the home you bought were $1,275 for the year fees, cost for improvements or repairs, and sales com-
and had been paid by the seller on August 15. You didn't missions.
reimburse the seller for your share of the real estate taxes If the seller actually paid for any item for which you are
from September 1 through December 31. You must re- liable and for which you can take a deduction (such as
duce the basis of your home by the $426 [(122 ÷ 365) × your share of the real estate taxes for the year of sale),
$1,275] the seller paid for you. You can deduct your $426 you must reduce your basis by that amount unless you are
share of real estate taxes on your return for the year you charged for it in the settlement.
purchased your home.
Items not added to basis and not deductible. Here
Example 2. You bought your home on May 3, 2023. are some settlement and closing costs that you can't de-
The property tax year in your area is the calendar year. duct or add to your basis.
The taxes for the previous year are assessed on January 1. Fire insurance premiums.
2 and are due on May 31 and November 30. Under state
law, the taxes become a lien on May 31. You agreed to 2. Charges for using utilities or other services related to
pay all taxes due after the date of sale. The taxes due in occupancy of the home before closing.
2023 for 2022 were $1,375. The taxes due in 2024 for 3. Rent for occupying the home before closing.
2023 will be $1,425.
You can't deduct any of the taxes paid in 2023 because 4. Charges connected with getting or refinancing a mort-
they relate to the 2022 property tax year and you didn't gage loan, such as:
own the home until 2023. Instead, you add the $1,375 to a. Loan assumption fees,
the cost (basis) of your home.
You owned the home in 2023 for 243 days (May 3 to b. Cost of a credit report,
December 31), so you can take a tax deduction on your
c. Fee for an appraisal required by a lender, and
2024 return of $946 [(243 ÷ 365) × $1,425] paid in 2024
for 2023. You add the remaining $479 ($1,425 − $946) of d. Mortgage insurance premiums.
taxes paid in 2024 to the cost (basis) of your home.
Points paid by seller. If you bought your home after
Settlement or closing costs. If you bought your home, April 3, 1994, you must reduce your basis by any points
you probably paid settlement or closing costs in addition paid for your mortgage by the person who sold you your
to the contract price. These costs are divided between you home.
and the seller according to the sales contract, local cus- If you bought your home after 1990 but before April 4,
tom, or understanding of the parties. If you built your 1994, you must reduce your basis by seller-paid points
home, you probably paid these costs when you bought the only if you deducted them. See Points, earlier, for the rules
land or settled on your mortgage. on deducting points.
The only settlement or closing costs you can deduct
are home mortgage interest and certain real estate taxes. Gift
You deduct them in the year you buy your home if you
itemize your deductions. You can add certain other settle- To figure the basis of property you receive as a gift, you
ment or closing costs to the basis of your home. must know its adjusted basis (defined later) to the donor
just before it was given to you, its fair market value at the
Items added to basis. You can include in your basis time it was given to you, and any gift tax paid on it.
the settlement fees and closing costs you paid for buying
your home. A fee is for buying the home if you would have Fair market value. Fair market value (FMV) is the price
had to pay it even if you paid cash for the home. at which property would change hands between a willing
buyer and a willing seller, neither being under any

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compulsion to buy or sell and who both have a reasonable to or less than the FMV, your basis at the time of receipt is
knowledge of all the necessary facts. the same as the donor's adjusted basis, plus the part of
any federal gift tax paid that is due to the net increase in
Donor's adjusted basis is more than FMV. If someone value of the home.
gave you your home and the donor's adjusted basis, when
it was given to you, was more than the FMV, your basis at Part of federal gift tax due to net increase in value.
the time of receipt is the same as the donor's adjusted ba- Figure the part of the federal gift tax paid that is due to the
sis. net increase in value of the home by multiplying the total
federal gift tax paid by a fraction. The numerator (top part)
Disposition basis. If the donor's adjusted basis at the of the fraction is the net increase in the value of the home,
time of the gift is more than the FMV, your basis (plus or and the denominator (bottom part) is the value of the
minus any required adjustments; see Adjusted Basis, home for gift tax purposes after reduction for any annual
later) when you dispose of the property will depend on exclusion and marital or charitable deduction that applies
whether you have a gain or a loss. to the gift. The net increase in the value of the home is its
• Your basis for figuring a gain is the same as the do- FMV minus the adjusted basis of the donor.
nor's adjusted basis.
Pub. 551 gives more information, including examples,
• Your basis for figuring a loss is the FMV when you re- on figuring your basis when you receive property as a gift.
ceived the gift.
If you use the donor's adjusted basis to figure a gain and it Inheritance
results in a loss, then you must use the FMV (at the time of
the gift) to refigure the loss. However, if using the FMV re- Your basis in a home you inherited is generally the FMV of
sults in a gain, then you have neither a gain nor a loss. the home on the date of the decedent's death or on the al-
ternative valuation date if the personal representative for
Example 1. Andrew received a house as a gift from the estate chooses to use alternative valuation.
Ishmael (the donor). At the time of the gift, the home had
an FMV of $80,000. Ishmael's adjusted basis was If an estate tax return was filed, your basis is generally
$100,000. After he received the house, no events occur- the value of the home listed on the estate tax return. If you
red to increase or decrease the basis. If Andrew sells the received a Schedule A (Form 8971) statement from an ex-
house for $120,000, he will have a $20,000 gain because ecutor of an estate or other person required to file an es-
he must use the donor's adjusted basis ($100,000) at the tate tax return after July 2015, you may be required to re-
time of the gift as his basis to figure the gain. port a basis consistent with the estate tax value of the
property.
Example 2. The facts are the same as in Example 1,
except this time Andrew sells the house for $70,000. He If an estate tax return wasn't filed, your basis is the ap-
will have a loss of $10,000 because he must use the FMV praised value of the home at the decedent's date of death
($80,000) at the time of the gift as his basis to figure the for state inheritance or transmission taxes.
loss.
For more information on consistent basis reporting, see
Example 3. The facts are the same as in Example 1, Column (e)—Cost or Other Basis in the Instructions for
except this time Andrew sells the house for $90,000. Ini- Form 8949. For more information on basis of inherited
tially, he figures the gain using Ishmael's adjusted basis property generally, see Pub. 551 and Pub. 559.
($100,000), which results in a loss of $10,000. Because it
is a loss, Andrew must now recalculate the loss using the If you inherited your home from someone who died in
FMV ($80,000), which results in a gain of $10,000. So in 2010, and the executor of the decedent's estate made the
this situation, Andrew will have neither a gain nor a loss. election to file Form 8939, Allocation of Increase in Basis
for Property Acquired From a Decedent, refer to the infor-
Donor's adjusted basis equal to or less than the FMV. mation provided by the executor or see Pub. 4895, Tax
If someone gave you your home after 1976 and the do- Treatment of Property Acquired From a Decedent Dying in
nor's adjusted basis, when it was given to you, was equal 2010, available at IRS.gov/Pub/IRS-Prior/p4895-2011.pdf.

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Adjusted Basis events can increase or decrease your original basis. The
result is called adjusted basis. See Table 3 for a list of
While you own your home, various events may take place some of the items that can adjust your basis.
that can change the original basis of your home. These

Table 3. Adjusted Basis

This table lists examples of some items that will generally increase or decrease your basis in your home. It isn’t intended
to be all-inclusive.
Increases to Basis Decreases to Basis
• Improvements: • Insurance or other reimbursement for casualty losses
– Putting an addition on your home • Deductible casualty loss not covered by insurance
– Replacing an entire roof • Payments received for easement or right-of-way granted
– Paving your driveway • Depreciation allowed or allowable if home is used for
– Installing central air conditioning business or rental purposes
– Rewiring your home • Value of subsidy for energy conservation measure excluded
• Assessments for local improvements from income
(see Assessments for local benefits under What You Can and • Adoption tax benefits
Can't Deduct, earlier) • The increase to the basis of the home which would be
• Amounts spent to restore damaged property allowed due to the installation of any qualifying energy
efficient properties must be reduced by any credit taken
against the income tax. Also, see the Instructions for Form
5695.
Assessments for local benefits costs and generally can't add them to the basis of your
home.
Improvements. An improvement materially adds to the However, repairs that are done as part of an extensive
value of your home, considerably prolongs its useful life, remodeling or restoration of your home are considered im-
or adapts it to new uses. You must add the cost of any im- provements. You add them to the basis of your home.
provements to the basis of your home. You can't deduct
these costs. Records to keep. You can use Table 4 as a guide to
Improvements include putting a recreation room in your help you keep track of improvements to your home. Also
unfinished basement, adding another bathroom or bed- see Keeping Records below.
room, putting up a fence, putting in new plumbing or wir-
Energy conservation subsidy. If a public utility gives
ing, installing a new roof, and paving your driveway.
you (directly or indirectly) a subsidy for the purchase or in-
Amount added to basis. The amount you add to your stallation of an energy conservation measure for your
basis for improvements is your actual cost. This includes home, don’t include the value of that subsidy in your in-
all costs for material and labor, except your own labor, and come. You must reduce the basis of your home by that
all expenses related to the improvement. For example, if value.
you had your lot surveyed to put up a fence, the cost of the An energy conservation measure is an installation or
survey is a part of the cost of the fence. modification primarily designed to reduce consumption of
You must also add to your basis state and local assess- electricity or natural gas or to improve the management of
ments for improvements such as streets and sidewalks if energy demand.
they increase the value of the property. These assess-
ments are discussed earlier under State and Local Real Adoption tax benefits. If you claim an adoption credit for
Estate Taxes. the cost of improvements you added to the basis of your
home, decrease the basis of your home by the credit al-
Improvements no longer part of home. Your home's lowed. This also applies to amounts you received under
adjusted basis doesn't include the cost of any improve- an employer's adoption assistance program and excluded
ments that are replaced and are no longer part of the from income. For more information, see Form 8839, Quali-
home. fied Adoption Expenses.
Example. You put wall-to-wall carpeting in your home
15 years ago. Later, you replaced that carpeting with new
wall-to-wall carpeting. The cost of the old carpeting you Keeping Records
replaced is no longer part of your home's adjusted basis.
Keeping full and accurate records is vital to prop-
Repairs versus improvements. A repair keeps your erly report your income and expenses, to support
home in an ordinary, efficient operating condition. It RECORDS your deductions and credits, and to know the ba-
doesn't add to the value of your home or prolong its life. sis or adjusted basis of your home. These records include
Repairs include repainting your home inside or outside, your purchase contract and settlement papers if you
fixing your gutters or floors, fixing leaks or plastering, and bought the property, or other objective evidence if you ac-
replacing broken window panes. You can't deduct repair quired it by gift, inheritance, or similar means. You should

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keep any receipts, canceled checks, and similar evidence the period of time after which no legal action can be
for improvements or other additions to the basis. In addi- brought.) For assessment of tax you owe, this is generally
tion, you should keep track of any decreases to the basis 3 years from the date you filed the return. For filing a claim
such as those listed in Table 3. for credit or refund, this is generally 3 years from the date
you filed the original return, or 2 years from the date you
How to keep records. How you keep records is up to paid the tax, whichever is later. Returns filed before the
you, but they must be clear and accurate and must be due date are treated as filed on the due date.
available to the IRS. You may need to keep records relating to the basis of
property (discussed earlier) for longer than the period of
How long to keep records. You must keep your records limitations. Keep those records as long as they are impor-
for as long as they are important for meeting any provision tant in figuring the basis of the original or replacement
of the federal tax law. property. Generally, this means for as long as you own the
Keep records that support an item of income, a deduc- property and, after you dispose of it, for the period of limi-
tion, or a credit appearing on a return until the period of tations that applies to you.
limitations for the return runs out. (A period of limitations is

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Table 4. Record of Home Improvements
                                                                        Keep for Your Records

           Keep this for your records. Also, keep receipts or other proof of improvements.

         Remove from this record any improvements that are no longer part of your main home. For example, if you put wall-to-wall 
CAUTION! carpeting in your home and later replace it with new wall-to-wall carpeting, remove the cost of the first carpeting. 

         (a)           (b)  (c)                                     (a)                   (b)                                 (c)
Type of Improvement    Date Amount  Type of Improvement                                   Date                                Amount
                                    Heating & Air
Additions:                           Conditioning:
Bedroom                             Heating system
Bathroom                            Central air conditioning
Deck                                Furnace
Garage                              Duct work
Porch                               Central humidifier
Patio                               Filtration system
Storage shed                        Other
Fireplace
Other                               Electrical:
                                    Lighting fixtures
Lawn & Grounds:                     Wiring upgrades
Landscaping                         Other
Driveway
Walkway                             Plumbing:
Fences                              Water heater
Retaining wall                      Soft water system
Sprinkler system                    Filtration system
Swimming pool                       Other
Exterior lighting
Other                               Insulation:
                                    Attic
Communications:                     Walls
Satellite dish                      Floors
Intercom                            Pipes and duct work
Security system                     Other
Other
                                    Interior 
Miscellaneous:                      Improvements:
Storm windows and                   Built-in appliances
doors
Roof                                Kitchen modernization
Central vacuum                      Bathroom modernization
Other                               Flooring
                                    Wall-to-wall carpeting
                                    Other

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                                                                    • The Online EIN Application IRS.gov/EIN ( ) helps you 
                                                                      get an employer identification number (EIN) at no 
How To Get Tax Help                                                   cost.
If you have questions about a tax issue; need help prepar-          • The Tax Withholding Estimator IRS.gov/W4App (      ) 
ing your tax return; or want to download free publications,           makes it easier for you to estimate the federal income 
forms, or instructions, go to IRS.gov to find resources that          tax you want your employer to withhold from your pay-
can help you right away.                                              check. This is tax withholding. See how your withhold-
                                                                      ing affects your refund, take-home pay, or tax due.
Preparing and filing your tax return.  After receiving all 
                                                                    • The First-Time Homebuyer Credit Account Look-up 
your wage and earnings statements (Forms W-2, W-2G, 
                                                                      (IRS.gov/HomeBuyer) tool provides information on 
1099-R,  1099-MISC,  1099-NEC,  etc.);  unemployment 
                                                                      your repayments and account balance.
compensation statements (by mail or in a digital format) or 
other  government  payment  statements  (Form  1099-G);             • The Sales Tax Deduction Calculator IRS.gov/ (
and  interest,  dividend,  and  retirement  statements  from          SalesTax) figures the amount you can claim if you 
banks and investment firms (Forms 1099), you have sev-                itemize deductions on Schedule A (Form 1040).
eral options to choose from to prepare and file your tax re-                Getting  answers  to  your  tax  questions.  On 
turn.  You  can  prepare  the  tax  return  yourself,  see  if  you         IRS.gov,  you  can  get  up-to-date  information  on 
qualify for free tax preparation, or hire a tax professional to             current events and changes in tax law.
prepare your return.
                                                                    • IRS.gov/Help: A variety of tools to help you get an-
Free options for tax preparation.    Your options for pre-            swers to some of the most common tax questions.
paring  and  filing  your  return  online  or  in  your  local  com-
                                                                    • IRS.gov/ITA: The Interactive Tax Assistant, a tool that 
munity, if you qualify, include the following.
                                                                      will ask you questions and, based on your input, pro-
•  Free File. This program lets you prepare and file your             vide answers on a number of tax topics.
   federal individual income tax return for free using soft-
                                                                    • IRS.gov/Forms: Find forms, instructions, and publica-
   ware or Free File Fillable Forms. However, state tax 
                                                                      tions. You will find details on the most recent tax 
   preparation may not be available through Free File. Go 
                                                                      changes and interactive links to help you find answers 
   to IRS.gov/FreeFile to see if you qualify for free online 
                                                                      to your questions.
   federal tax preparation, e-filing, and direct deposit or 
   payment options.                                                 • You may also be able to access tax information in your 
                                                                      e-filing software.
•  VITA. The Volunteer Income Tax Assistance (VITA) 
   program offers free tax help to people with 
   low-to-moderate incomes, persons with disabilities,              Need someone to prepare your tax return?             There are 
   and limited-English-speaking taxpayers who need                  various  types  of  tax  return  preparers,  including  enrolled 
   help preparing their own tax returns. Go to IRS.gov/             agents, certified public accountants (CPAs), accountants, 
   VITA, download the free IRS2Go app, or call                      and many others who don’t have professional credentials. 
   800-906-9887 for information on free tax return prepa-           If  you  choose  to  have  someone  prepare  your  tax  return, 
   ration.                                                          choose that preparer wisely. A paid tax preparer is:
•  TCE. The Tax Counseling for the Elderly (TCE) pro-               • Primarily responsible for the overall substantive accu-
   gram offers free tax help for all taxpayers, particularly          racy of your return,
   those who are 60 years of age and older. TCE volun-
                                                                    • Required to sign the return, and
   teers specialize in answering questions about pen-
   sions and retirement-related issues unique to seniors.           • Required to include their preparer tax identification 
   Go to IRS.gov/TCE or download the free IRS2Go app                  number (PTIN).
   for information on free tax return preparation.                          Although the tax preparer always signs the return, 
•  MilTax. Members of the U.S. Armed Forces and quali-              !       you're  ultimately  responsible  for  providing  all  the 
   fied veterans may use MilTax, a free tax service of-             CAUTION information required for the preparer to accurately 
   fered by the Department of Defense through Military              prepare your return and for the accuracy of every item re-
   OneSource. For more information, go to                           ported on the return. Anyone paid to prepare tax returns 
   MilitaryOneSource MilitaryOneSource.mil/MilTax ( ).              for  others  should  have  a  thorough  understanding  of  tax 
      Also, the IRS offers Free Fillable Forms, which can           matters. For more information on how to choose a tax pre-
   be completed online and then e-filed regardless of in-           parer, go to Tips for Choosing a Tax Preparer on IRS.gov.
   come.
Using online tools to help prepare your return.    Go to            Employers can register to use Business Services On-
IRS.gov/Tools for the following.                                    line. The Social Security Administration (SSA) offers on-
                                                                    line service at SSA.gov/employer for fast, free, and secure 
•  The Earned Income Tax Credit Assistant IRS.gov/ (                W-2 filing options to CPAs, accountants, enrolled agents, 
   EITCAssistant) determines if you’re eligible for the             and  individuals  who  process  Form  W-2,  Wage  and  Tax 
   earned income credit (EIC).

20                                                                                                  Publication 530 (2023)

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Statement, and Form W-2c, Corrected Wage and Tax Getting tax forms and publications. Go to IRS.gov/
Statement. Forms to view, download, or print all the forms, instruc-
tions, and publications you may need. Or, you can go to
IRS social media. Go to IRS.gov/SocialMedia to see the IRS.gov/OrderForms to place an order.
various social media tools the IRS uses to share the latest
information on tax changes, scam alerts, initiatives, prod- Getting tax publications and instructions in eBook
ucts, and services. At the IRS, privacy and security are our format. Download and view most tax publications and in-
highest priority. We use these tools to share public infor- structions (including the Instructions for Form 1040) on
mation with you. Don’t post your social security number mobile devices as eBooks at IRS.gov/eBooks.
(SSN) or other confidential information on social media IRS eBooks have been tested using Apple's iBooks for
sites. Always protect your identity when using any social iPad. Our eBooks haven’t been tested on other dedicated
networking site. eBook readers, and eBook functionality may not operate
The following IRS YouTube channels provide short, in- as intended.
formative videos on various tax-related topics in English,
Spanish, and ASL. Access your online account. Go to IRS.gov/Account to
securely access information about your federal tax ac-
• Youtube.com/irsvideos. count.
• Youtube.com/irsvideosmultilingua. • View the amount you owe and a breakdown by tax
• Youtube.com/irsvideosASL. year.
Watching IRS videos. The IRS Video portal • See payment plan details or apply for a new payment
(IRSVideos.gov) contains video and audio presentations plan.
for individuals, small businesses, and tax professionals. • Make a payment or view 5 years of payment history
and any pending or scheduled payments.
Online tax information in other languages. You can
find information on IRS.gov/MyLanguage if English isn’t • Access your tax records, including key data from your
your native language. most recent tax return, and transcripts.
• View digital copies of select notices from the IRS.
Free Over-the-Phone Interpreter (OPI) Service. The
IRS is committed to serving taxpayers with limited-English • Approve or reject authorization requests from tax pro-
proficiency (LEP) by offering OPI services. The OPI Serv- fessionals.
ice is a federally funded program and is available at Tax- • View your address on file or manage your communica-
payer Assistance Centers (TACs), most IRS offices, and tion preferences.
every VITA/TCE tax return site. The OPI Service is acces-
sible in more than 350 languages. Get a transcript of your return. With an online account,
you can access a variety of information to help you during
Accessibility Helpline available for taxpayers with the filing season. You can get a transcript, review your
disabilities. Taxpayers who need information about ac- most recently filed tax return, and get your adjusted gross
cessibility services can call 833-690-0598. The Accessi- income. Create or access your online account at IRS.gov/
bility Helpline can answer questions related to current and Account.
future accessibility products and services available in al-
ternative media formats (for example, braille, large print, Tax Pro Account. This tool lets your tax professional
audio, etc.). The Accessibility Helpline does not have ac- submit an authorization request to access your individual
cess to your IRS account. For help with tax law, refunds, or taxpayer IRS online account. For more information, go to
account-related issues, go to IRS.gov/LetUsHelp. IRS.gov/TaxProAccount.

Note. Form 9000, Alternative Media Preference, or Using direct deposit. The safest and easiest way to re-
Form 9000(SP) allows you to elect to receive certain types ceive a tax refund is to e-file and choose direct deposit,
of written correspondence in the following formats. which securely and electronically transfers your refund di-
rectly into your financial account. Direct deposit also
• Standard Print.
avoids the possibility that your check could be lost, stolen,
• Large Print. destroyed, or returned undeliverable to the IRS. Eight in
• Braille. 10 taxpayers use direct deposit to receive their refunds. If
you don’t have a bank account, go to IRS.gov/
• Audio (MP3). DirectDeposit for more information on where to find a bank
• Plain Text File (TXT). or credit union that can open an account online.

• Braille Ready File (BRF). Reporting and resolving your tax-related identity
theft issues.
Disasters. Go to IRS.gov/DisasterRelief to review the
available disaster tax relief. • Tax-related identity theft happens when someone
steals your personal information to commit tax fraud.

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Your taxes can be affected if your SSN is used to file a Note. The IRS uses the latest encryption technology to
fraudulent return or to claim a refund or credit. ensure that the electronic payments you make online, by
phone, or from a mobile device using the IRS2Go app are
• The IRS doesn’t initiate contact with taxpayers by
safe and secure. Paying electronically is quick, easy, and
email, text messages (including shortened links), tele-
faster than mailing in a check or money order.
phone calls, or social media channels to request or
verify personal or financial information. This includes What if I can’t pay now? Go to IRS.gov/Payments for
requests for personal identification numbers (PINs), more information about your options.
passwords, or similar information for credit cards,
banks, or other financial accounts. • Apply for an online payment agreement IRS.gov/ (
OPA) to meet your tax obligation in monthly install-
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft ments if you can’t pay your taxes in full today. Once
Central webpage, for information on identity theft and you complete the online process, you will receive im-
data security protection for taxpayers, tax professio- mediate notification of whether your agreement has
nals, and businesses. If your SSN has been lost or been approved.
stolen or you suspect you’re a victim of tax-related
identity theft, you can learn what steps you should • Use the Offer in Compromise Pre-Qualifier to see if
take. you can settle your tax debt for less than the full
amount you owe. For more information on the Offer in
• Get an Identity Protection PIN (IP PIN). IP PINs are Compromise program, go to IRS.gov/OIC.
six-digit numbers assigned to taxpayers to help pre-
vent the misuse of their SSNs on fraudulent federal in- Filing an amended return. Go to IRS.gov/Form1040X
come tax returns. When you have an IP PIN, it pre- for information and updates.
vents someone else from filing a tax return with your
SSN. To learn more, go to IRS.gov/IPPIN. Checking the status of your amended return. Go to
IRS.gov/WMAR to track the status of Form 1040-X amen-
Ways to check on the status of your refund. ded returns.
• Go to IRS.gov/Refunds. It can take up to 3 weeks from the date you filed
• Download the official IRS2Go app to your mobile de- ! your amended return for it to show up in our sys-
vice to check your refund status. CAUTION tem, and processing it can take up to 16 weeks.

• Call the automated refund hotline at 800-829-1954.
Understanding an IRS notice or letter you’ve re-
The IRS can’t issue refunds before mid-February ceived. Go to IRS.gov/Notices to find additional informa-
! for returns that claimed the EIC or the additional tion about responding to an IRS notice or letter.
CAUTION child tax credit (ACTC). This applies to the entire
refund, not just the portion associated with these credits. Responding to an IRS notice or letter. You can now
upload responses to all notices and letters using the
Making a tax payment. Payments of U.S. tax must be Document Upload Tool. For notices that require additional
remitted to the IRS in U.S. dollars. Digital assets are not action, taxpayers will be redirected appropriately on
accepted. Go to IRS.gov/Payments for information on how IRS.gov to take further action. To learn more about the
to make a payment using any of the following options. tool, go to IRS.gov/Upload.

• IRS Direct Pay: Pay your individual tax bill or estimated Note. You can use Schedule LEP (Form 1040), Re-
tax payment directly from your checking or savings ac- quest for Change in Language Preference, to state a pref-
count at no cost to you. erence to receive notices, letters, or other written commu-
nications from the IRS in an alternative language. You may
• Debit Card, Credit Card, or Digital Wallet: Choose an
not immediately receive written communications in the re-
approved payment processor to pay online or by
quested language. The IRS’s commitment to LEP taxpay-
phone.
ers is part of a multi-year timeline that began providing
• Electronic Funds Withdrawal: Schedule a payment translations in 2023. You will continue to receive communi-
when filing your federal taxes using tax return prepara- cations, including notices and letters, in English until they
tion software or through a tax professional. are translated to your preferred language.
• Electronic Federal Tax Payment System: Best option
Contacting your local TAC. Keep in mind, many ques-
for businesses. Enrollment is required.
tions can be answered on IRS.gov without visiting a TAC.
• Check or Money Order: Mail your payment to the ad- Go to IRS.gov/LetUsHelp for the topics people ask about
dress listed on the notice or instructions. most. If you still need help, TACs provide tax help when a
tax issue can’t be handled online or by phone. All TACs
• Cash: You may be able to pay your taxes with cash at
now provide service by appointment, so you’ll know in ad-
a participating retail store.
vance that you can get the service you need without long
• Same-Day Wire: You may be able to do same-day wait times. Before you visit, go to IRS.gov/TACLocator to
wire from your financial institution. Contact your finan- find the nearest TAC and to check hours, available serv-
cial institution for availability, cost, and time frames. ices, and appointment options. Or, on the IRS2Go app,

22 Publication 530 (2023)

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under the Stay Connected tab, choose the Contact Us op- How Can You Reach TAS?
tion and click on “Local Offices.”
TAS has offices in every state, the District of Columbia,
and Puerto Rico. To find your advocate’s number:
The Taxpayer Advocate Service (TAS)
Is Here To Help You • Go to TaxpayerAdvocate.IRS.gov/Contact-Us;
What Is TAS? • Download Pub. 1546, The Taxpayer Advocate Service
Is Your Voice at the IRS, available at IRS.gov/pub/irs-
TAS is an independent organization within the IRS that pdf/p1546.pdf;
helps taxpayers and protects taxpayer rights. TAS strives • Call the IRS toll free at 800-TAX-FORM
to ensure that every taxpayer is treated fairly and that you (800-829-3676) to order a copy of Pub. 1546;
know and understand your rights under the Taxpayer Bill
of Rights. • Check your local directory; or
• Call TAS toll free at 877-777-4778.
How Can You Learn About Your Taxpayer
Rights? How Else Does TAS Help Taxpayers?

The Taxpayer Bill of Rights describes 10 basic rights that TAS works to resolve large-scale problems that affect
all taxpayers have when dealing with the IRS. Go to many taxpayers. If you know of one of these broad issues,
TaxpayerAdvocate.IRS.gov to help you understand what report it to TAS at IRS.gov/SAMS. Be sure to not include
these rights mean to you and how they apply. These are any personal taxpayer information.
your rights. Know them. Use them.
Low Income Taxpayer Clinics (LITCs)
What Can TAS Do for You?
LITCs are independent from the IRS and TAS. LITCs rep-
TAS can help you resolve problems that you can’t resolve resent individuals whose income is below a certain level
with the IRS. And their service is free. If you qualify for and who need to resolve tax problems with the IRS. LITCs
their assistance, you will be assigned to one advocate can represent taxpayers in audits, appeals, and tax collec-
who will work with you throughout the process and will do tion disputes before the IRS and in court. In addition,
everything possible to resolve your issue. TAS can help LITCs can provide information about taxpayer rights and
you if: responsibilities in different languages for individuals who
• Your problem is causing financial difficulty for you, speak English as a second language. Services are offered
your family, or your business; for free or a small fee. For more information or to find an
LITC near you, go to the LITC page at
• You face (or your business is facing) an immediate TaxpayerAdvocate.IRS.gov/LITC or see IRS Pub. 4134,
threat of adverse action; or Low Income Taxpayer Clinic List, at IRS.gov/pub/irs-pdf/
• You’ve tried repeatedly to contact the IRS but no one p4134.pdf.
has responded, or the IRS hasn’t responded by the
date promised.

Publication 530 (2023) 23

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                     To help us develop a more useful index, please let us know if you have ideas for index entries.
Index                See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
 
                                 Inherited 16
A                                Mortgage interest  6                     N
Adjusted basis 17                Purchase of  14                          Nondeductible payments                         4 15, 
Assessments:                     Received as gift 15
  For local benefits 5          Homeowners association                    P
  Homeowners association  5      assessments    5                         Points 7
Assistance (See Tax help)       House payment   3                         Prepaid interest 6
                                Housing allowance, minister or            Publications (See Tax help)
B                                military 3
Basis 14                                                                  R
                                I
                                                                          Recordkeeping  17
C                               Improvements    17 19,                    Refund of:
Certificate, mortgage credit 12 Inheritance  16                            Mortgage interest 6 11, 
Construction 14                 Insurance 15                               Real estate taxes 4
Cooperatives 5 7,               Interest:                                 Repairs 17
Cost basis 14                    Home mortgage    6
Credit:                          Prepaid  6                               S
  Mortgage interest  12                                                   Sales taxes 5
                                K
                                                                          SBA Disaster loans  7
D                               Keeping records  17                       Settlement or closing costs:
Deduction:                                                                 Basis of home  15
                                L
  Home mortgage interest  6                                                Mortgage interest 7
  Real estate taxes  4          Late payment charge    6                   Real estate taxes 4 14, 
Disaster loans 7                Local benefits, assessments for         5 Stamp taxes  5
                                                                          State and local real estate taxes                    4
E                               M
                                                                           Deductible 4
Escrow accounts    4            MCC (Mortgage credit                       Paid at settlement or closing                  4
                                 certificate) 12                           Refund or rebate  4
F                               Minister's or military housing            Statement, mortgage interest                    11
                                 allowance   3
Fire insurance premiums   15    Mortgage credit certificate               T
Form:                            (MCC)    12
  1098  11                      Mortgage debt forgiveness            11   Tax help 20
  8396  12                      Mortgage interest:                        Taxes
                                 Credit   12                               Real estate  5
G                                Deduction   6                             Sales taxes  5
Gift of home 15                  Late payment charge   6                   State and local real estate                   4
Ground rent  6                   Paid at settlement 7                     Transfer taxes 5
                                 Refund   6 11, 
                                                                          W
H                                Statement   11
Home:                           Mortgage prepayment penalty             6 What you can and can’t deduct                        3
  Acquisition debt 11

24                                                                                    Publication 530 (2023)

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