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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . .        6
                                                              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
2022 Returns
                                                              How To Get Tax Help         . . . . . . . . . . . . . . . . . . . . . .    20
                                                              Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

                                                              What’s New
                                                              Mortgage  insurance  premiums.                  The  itemized  deduc-
                                                              tion  for  mortgage  insurance  premiums  has  expired.  The 
                                                              deduction doesn't exist for premiums paid after December 
                                                              31, 2021.
                                                              Energy efficient home improvement credit.                         The non-
                                                              business  energy  property  credit  has  changed  to  the  en-
                                                              ergy efficient home improvement credit. The credit is ex-
                                                              tended  to  property  placed  in  service  through  December 
                                                              31, 2022.

                                                              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.
                                                              Home  Affordable  Modification  Program  (HAMP).                            If 
                                                              you benefit from Pay-for-Performance Success Payments, 
                                                              the payments aren’t taxable under HAMP.
                                                              Repayment of first-time homebuyer credit.                       Generally, 
                                                              you  must  repay  any  credit  you  claimed  for  a  home  you 
                                                              bought if you bought the home in 2008. See Form 5405 
                                                              and its instructions for details and for exceptions to the re-
                                                              payment rule.
                                                              Home equity loan interest.            No matter when the indebt-
                                                              edness was incurred, you can no longer deduct the inter-
                                                              est  from  a  loan  secured  by  your  home  to  the  extent  the 
                                                              loan proceeds weren't used to buy, build, or substantially 
                                                              improve your home.
Get forms and other information faster and easier at:
• IRS.gov (English)         • IRS.gov/Korean (한국어)            Homeowner Assistance Fund.                  The Homeowner Assis-
• IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский)       tance Fund program (HAF) was established to provide fi-
• IRS.gov/Chinese (中文)      • IRS.gov/Vietnamese (Tiếng Việt) 
                                                              nancial assistance to eligible homeowners for purposes of 

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paying certain expenses related to their principal resi- credit is extended to property placed in service
dence to prevent mortgage delinquencies, defaults, fore- through December 31, 2022.
closures, loss of utilities or home energy services, and
• The exclusion from income of discharges of qualified
also displacements of homeowners experiencing financial
principal residence indebtedness has been extended
hardship after January 21, 2020. If you are a homeowner
through 2026.
who received assistance under the HAF, the payments
from the HAF program are not considered income to you Residential energy credits. You may be able to take a
and you cannot take a deduction or credit for expenditures credit if you made energy saving improvements to your
paid from the HAF program. home located in the United States in 2022. See the In-
Rev. Proc. 2021-47 provides an optional method for structions for Form 5695, Residential Energy Credits, for
certain homeowners who itemize their deductions to de- more information.
termine the amount you can deduct for home mortgage in- Mortgage debt forgiveness. You can exclude from
terest and state and local real property taxes if you paid gross income any discharges of qualified principal resi-
the mortgage servicer with your own funds but also re- dence indebtedness made after 2006 and in most cases
ceived financial assistance from the HAF program descri- before 2026. You must reduce the basis of your principal
bed in Rev. Proc. 2021-47. Please note, though Rev. residence (but not below zero) by the amount you ex-
Proc. 2021-47 provides for the possible deduction of clude. See Discharges of qualified principal residence in-
home mortgage insurance premiums, you cannot deduct debtedness, later, and Form 982, Reduction of Tax Attrib-
any home mortgage insurance premiums you paid after utes Due to Discharge of Indebtedness (and Section 1082
December 31, 2021. For more details about the HAF pro- Basis Adjustment), for more information.
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-
1. You paid a portion of the mortgage interest or state lected by the Center may appear in this publication on pa-
and local real property taxes from your own sources ges that would otherwise be blank. You can help bring
(that is, out-of-pocket payments not subsidized by these children home by looking at the photographs and
any governmental financial assistance programs). calling 1-800-THE-LOST (1-800-843-5678) if you recog-
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.
The optional method allows you to deduct the mort- Introduction
gage interest and state and local real property taxes re- This publication provides tax information for homeowners.
ported on Form 1098, Mortgage Interest Statement, but Your home may be a house, condominium, cooperative
only up to the amount you paid from your own sources to apartment, mobile home, houseboat, or house trailer that
the mortgage servicer during the tax year. You are not re- contains sleeping space and toilet and cooking facilities.
quired to use this optional method to figure your deduction This publication explains how you treat items such as
for mortgage interest and state and local real property settlement and closing costs, real estate taxes, sales
taxes on your main home. taxes, home mortgage interest, and repairs.
See State and Local Real Estate Taxes and Home The following topics are explained.
Mortgage Interest, later, to determine whether you meet
the rules to deduct all of the mortgage interest on your • What you can and can’t deduct on your tax return.
loan and all of the real estate taxes on your main home. • The tax credit you can claim if you received a mort-
For more details about the HAF program, see Homeowner gage credit certificate when you bought your home.
Assistance Fund at Treasury.gov/haf. If you received HAF
• Why you should keep track of adjustments to the ba-
funds from an Indian Tribal Government or an Alaska Na-
sis of your home. (Your home's basis is generally what
tive Corporation and want more details about the HAF
it cost; adjustments include the cost of any improve-
program, see frequently asked questions (FAQs) at
ments you might make.)
IRS.gov/ITGANCFAQs.
• What records you should keep as proof of the basis
See State and Local Real Estate Taxes and
and adjusted basis.
! Home Mortgage Interest, later, to determine
CAUTION whether you meet the rules to deduct all of the
Comments and suggestions. We welcome your com-
mortgage interest on your loan and all of the real estate ments about this publication and suggestions for future
taxes on your main home. editions.
You can send us comments through IRS.gov/
Extended tax benefit. Certain tax benefits, including the
FormComments. Or, you can write to the Internal Reve-
following, that were set to expire have been extended.
nue Service, Tax Forms and Publications, 1111 Constitu-
• The nonbusiness energy property credit has changed tion Ave. NW, IR-6526, Washington, DC 20224.
to the energy efficient home improvement credit. The Although we can’t respond individually to each com-
ment received, we do appreciate your feedback and will

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consider your comments and suggestions as we revise 1040-SR, U.S. Income Tax Return for Seniors, and item-
our tax forms, instructions, and publications. Don’t send ize your deductions on Schedule A (Form 1040). If you
tax questions, tax returns, or payments to the above ad- itemize, you can’t take the standard deduction.
dress.
This section explains what expenses you can deduct
Getting answers to your tax questions. If you have as a homeowner. It also points out expenses that you
a tax question not answered by this publication or the How can’t deduct. There are three primary discussions: state
To Get Tax Help section at the end of this publication, go and local real estate taxes, sales taxes, and home mort-
to the IRS Interactive Tax Assistant page at IRS.gov/ gage interest.
Help/ITA where you can find topics by using the search
Generally, your real estate taxes and home mortgage
feature or viewing the categories listed.
interest are included in your house payment.
Getting tax forms, instructions, and publications.
Go to IRS.gov/Forms to download current and prior-year Your house payment. If you took out a mortgage (loan)
forms, instructions, and publications. to finance the purchase of your home, you probably have
to make monthly house payments. Your house payment
Ordering tax forms, instructions, and publications. may include several costs of owning a home. The only
Go to IRS.gov/OrderForms to order current forms, instruc- costs you can deduct are state and local real estate taxes
tions, and publications; call 800-829-3676 to order actually paid to the taxing authority and interest that quali-
prior-year forms and instructions. The IRS will process fies as home mortgage interest.These are discussed in
your order for forms and publications as soon as possible. more detail later.
Don’t resubmit requests you’ve already sent us. You can Some nondeductible expenses that may be included in
get forms and publications faster online. your house payment include:
Useful Items • Fire or homeowner's insurance premiums,
You may want to see: • Mortgage insurance premiums, and
• The amount applied to reduce the principal of the
Publication mortgage.
4681 4681 Canceled Debts, Foreclosures,
Repossessions, and Abandonments Minister's or military housing allowance. If you are a
minister or a member of the uniformed services and re-
523 523 Selling Your Home
ceive a housing allowance that isn’t taxable, you can still
525 525 Taxable and Nontaxable Income deduct your real estate taxes and your home mortgage in-
527 527 Residential Rental Property terest. You don’t have to reduce your deductions by your
nontaxable allowance. For more information, see Pub.
547 547 Casualties, Disasters, and Thefts
517, Social Security and Other Information for Members
551 551 Basis of Assets of the Clergy and Religious Workers, and Pub. 3, Armed
555 555 Community Property Forces' Tax Guide.

587 587 Business Use of Your Home Nondeductible payments. You can’t deduct any of the
936 936 Home Mortgage Interest Deduction following items.
Form (and Instructions) • Insurance, including fire and comprehensive cover-
age, and title insurance.
Schedule A (Form 1040) Schedule A (Form 1040) Itemized Deductions
5405 5405 Repayment of the First-Time Homebuyer • Wages you pay for domestic help.
Credit • Depreciation.
5695 5695 Residential Energy Credits • The cost of utilities, such as gas, electricity, or water.
8396 8396 Mortgage Interest Credit • Most settlement costs. See Settlement or closing
982 982 Reduction of Tax Attributes Due to Discharge of costs under Cost as Basis, later, for more information.
Indebtedness (and Section 1082 Basis Forfeited deposits, down payments, or earnest
•
Adjustment) money.
See How To Get Tax Help, near the end of this publica- Internet or wifi system or service.
•
tion, for information about getting publications and forms.
• Homeowners association fees, condominium associa-
tion fees, or common charges.
What You Can and Can’t • Repairs to home.

Deduct

To deduct expenses of owning a home, you must file
Form 1040, U.S. Individual Income Tax Return, or Form

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Hardest Hit Fund and Emergency a taxing authority (either directly or through an escrow ac-
count) during the year. If you own a cooperative apart-
Homeowners' Loan Programs ment, see Special Rules for Cooperatives, later.

You can use a special method to figure your deduction for Where to deduct real estate taxes. Enter the amount of
mortgage interest and real estate taxes on your main your deductible state and local real estate taxes on
home if you meet the following two conditions. Schedule A (Form 1040), line 5b.

1. If you received assistance under: Real estate taxes paid at settlement or closing. Real
a. A State Housing Finance Agency (State HFA) estate taxes are generally divided so that you and the
Hardest Hit Fund program in which program pay- seller each pay taxes for the part of the property tax year
ments could be used to pay mortgage interest, or you owned the home. Your share of these taxes is fully
deductible if you itemize your deductions.
b. An Emergency Homeowners' Loan Program
(EHLP) administered by the Department of Hous- Division of real estate taxes. For federal income tax
ing and Urban Development (HUD) or a state. purposes, the seller is treated as paying the property
taxes up to, but not including, the date of sale. You (the
2. If you meet the rules to deduct all of the mortgage in- buyer) are treated as paying the taxes beginning with the
terest on your loan and all of the real estate taxes on date of sale. This applies regardless of the lien dates un-
your main home, then you can use a special method der local law. Generally, this information is included on the
to figure your deduction for mortgage interest and real settlement statement you get at closing.
estate taxes on your main home. You and the seller each are considered to have paid
If you meet these conditions, then you can deduct all of your own share of the taxes, even if one or the other paid
the payments you actually made during the year to your the entire amount. You each can deduct your own share, if
mortgage servicer, the State HFA, or HUD on the home you itemize deductions, for the year the property is sold.
mortgage (including the amount shown in box 3 of Form
1098-MA, Mortgage Assistance Payments), but not more Example. You bought your home on September 1.
than the sum of the amounts shown in box 1 (mortgage in- The property tax year (the period to which the tax relates)
terest received) and box 10 (other) of Form 1098. in your area is the calendar year. The tax for the year was
$730 and was due and paid by the seller on August 15.
You may first allocate amounts paid to mortgage inter- You owned your new home during the property tax year
est up to the amount shown on Form 1098. You may then for 122 days (September 1 to December 31, including
use any reasonable method to allocate the remaining bal- your date of purchase). You figure your deduction for real
ance of the payments to real property taxes. Regardless estate taxes on your home as follows.
of how you determine the deductible amount under this 1. Enter the total real estate taxes for the real property
special safe harbor method, any amount allocated to state tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . $730
or local property taxes is subject to the limitation on the 2. Enter the number of days in the property tax year that
deduction for state and local taxes. However, you aren’t you owned the property . . . . . . . . . . . . . . . . . 122
required to use this special method to figure your deduc- 3. Divide line 2 by 365 . . . . . . . . . . . . . . . . . . . . 0.3342
tion for mortgage interest and real estate taxes on your 4. Multiply line 1 by line 3. This is your deduction. Enter
it on Schedule A (Form 1040), line 5b. . . . . . . . . . $244
main home.
You can deduct $244 on your return for the year if you
State and Local Real Estate Taxes itemize your deductions. You are considered to have paid
this amount and can deduct it on your return even if, under
Most state and local governments charge an annual tax the contract, you didn’t have to reimburse the seller.
on the value of real property. This is called a real estate Delinquent taxes. Delinquent taxes are unpaid taxes
tax. You can deduct the tax if it is assessed uniformly at a that were imposed on the seller for an earlier tax year. If
like rate on all real property throughout the community. you agree to pay delinquent taxes when you buy your
The proceeds must be for general community or govern- home, you can’t deduct them. You treat them as part of
mental purposes and not be a payment for a special privi- the cost of your home. See Real estate taxes, later, under
lege granted or special service rendered to you. Basis.
The deduction for state and local taxes, including
Escrow accounts. Many monthly house payments in-
! real estate taxes, is limited to $10,000 ($5,000 if clude an amount placed in escrow (put in the care of a
CAUTION married filing separately). See the Instructions for
Schedule A (Form 1040) for more information. third party) for real estate taxes. You may not be able to
deduct the total you pay into the escrow account. You can
deduct only the real estate taxes that the lender actually
Deductible Real Estate Taxes paid from escrow to the taxing authority. Your real estate
tax bill will show this amount.
You can deduct real estate taxes imposed on you. You
must have paid them either at settlement or closing, or to Refund or rebate of real estate taxes. If you receive a
refund or rebate of real estate taxes this year for amounts

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you paid this year, you must reduce your real estate tax Homeowners’ association assessments. You can't
deduction by the amount refunded to you. If the refund or deduct these assessments because the homeowners’ as-
rebate was for real estate taxes paid for a prior year, you sociation, rather than a state or local government, impo-
may have to include some or all of the refund in your in- ses them.
come. For more information, see Recoveries in Pub. 525.
Foreign taxes you paid on real estate. You can't de-
Items You Can’t Deduct as Real Estate duct foreign taxes you paid on real estate.
Taxes
Special Rules for Cooperatives
The following items aren’t deductible as real estate taxes.
If you own a cooperative apartment, some special rules
Charges for services. An itemized charge for services apply to you, though you generally receive the same tax
to specific property or people isn’t a tax, even if the charge treatment as other homeowners. As an owner of a cooper-
is paid to the taxing authority. You can’t deduct the charge ative apartment, you own shares of stock in a corporation
as a real estate tax if it is: that owns or leases housing facilities. You can deduct
your share of the corporation's deductible real estate
• A unit fee for the delivery of a service (such as a $5
taxes if the cooperative housing corporation meets the fol-
fee charged for every 1,000 gallons of water you use),
lowing conditions.
• A periodic charge for a residential service (such as a
1. The corporation has only one class of stock outstand-
$20 per month or $240 annual fee charged to each
ing.
homeowner for trash collection), or
2. Each stockholder, solely because of ownership of the
• A flat fee charged for a single service provided by your
stock, can live in a house, apartment, or house trailer
local government (such as a $30 charge for mowing
owned or leased by the corporation.
your lawn because it had grown higher than permitted
under a local ordinance). 3. No stockholder can receive any distribution out of
capital, except on a partial or complete liquidation of
You must look at your real estate tax bill to decide
the corporation.
! if any nondeductible itemized charges, such as
CAUTION those listed above, are included in the bill. If your 4. At least one of the following.
taxing authority (or lender) doesn’t furnish you a copy of
a. At least 80% of the corporation's gross income for
your real estate tax bill, ask for it. Contact the taxing au-
the tax year was paid by the tenant-stockholders.
thority if you need additional information about a specific
For this purpose, gross income means all income
charge on your real estate tax bill.
received during the entire tax year, including any
received before the corporation changed to coop-
Assessments for local benefits. You can’t deduct erative ownership.
amounts you pay for local benefits that tend to increase
the value of your property. Local benefits include the con- b. At least 80% of the total square footage of the cor-
struction of streets, sidewalks, or water and sewer sys- poration's property must be available for use by
tems. You must add these amounts to the basis of your the tenant-stockholders during the entire tax year.
property. c. At least 90% or more of the expenditures paid or
You can, however, deduct assessments (or taxes) for incurred by the corporation were used for the ac-
local benefits if they are for maintenance, repair, or inter- quisition, construction, management, mainte-
est charges related to those benefits. An example is a nance, or care of the corporation’s property for the
charge to repair an existing sidewalk and any interest in- benefit of the tenant-shareholders during the en-
cluded in that charge. tire tax year.
If only a part of the assessment is for maintenance, re-
pair, or interest charges, you must be able to show the Tenant-stockholders. A tenant-stockholder can be any
amount of that part to claim the deduction. If you can’t entity (such as a company or corporation, trust, estate,
show what part of the assessment is for maintenance, re- partnership, or association) as well as an individual. The
pair, or interest charges, you can’t deduct any of it. tenant-stockholder doesn't have to live in any of the coop-
An assessment for a local benefit may be listed as an erative's dwelling units. The units that the tenant-stock-
item in your real estate tax bill. If so, use the rules in this holder has the right to occupy can be rented to others.
section to find how much of it, if any, you can deduct.
Deductible taxes. You figure your share of real estate
Transfer taxes (or stamp taxes). You can't deduct taxes in the following way.
transfer taxes and similar taxes and charges on the sale of
1. Divide the number of your shares of stock by the total
a personal home. If you are the buyer and you pay them,
number of shares outstanding, including any shares
include them in the cost basis of the property. If you are
held by the corporation.
the seller and you pay them, they are expenses of the sale
and reduce the amount realized on the sale. 2. Multiply the corporation's deductible real estate taxes
by the number you figured in (1). This is your share of
the real estate taxes.

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Generally, the corporation will tell you your share of its The only exception to this limit is for loans taken out on or
real estate tax. This is the amount you can deduct if it rea- before October 13, 1987; the loan proceeds for these
sonably reflects the cost of real estate taxes for your loans are treated as having been used to buy, build, or
dwelling unit. substantially improve the home. See Pub. 936 for more in-
formation about loans taken out on or before October 13,
Refund of real estate taxes. If the corporation re-
1987.
ceives a refund of real estate taxes it paid in an earlier
year, it must reduce the amount of real estate taxes paid Limit on loans taken out on or before December
this year when it allocates the tax expense to you. Your 15, 2017. For qualifying debt taken out on or before De-
deduction for real estate taxes the corporation paid this cember 15, 2017, you can only deduct home mortgage in-
year is reduced by your share of the refund the corpora- terest on up to $1 million ($500,000 if you are married fil-
tion received. ing separately) of that debt. The only exception is for
loans taken out on or before October 13, 1987; see Pub.
Sales Taxes 936 for more information about loans taken out on or be-
fore October 13, 1987.
Generally, you can elect to deduct state and local general See Pub. 936 to figure your deduction if you have loans
sales taxes instead of state and local income taxes as an taken out on or before December 15, 2017, that exceed
itemized deduction on Schedule A (Form 1040). You $1 million ($500,000 if you are married filing separately).
must check the box on Schedule A (Form 1040), line 5a, Limit on loans taken out after December 15, 2017.
if you elect this option. Deductible sales taxes may include For qualifying debt taken out after December 15, 2017,
sales taxes paid on your home (including mobile and pre- you can only deduct home mortgage interest on up to
fabricated), or home building materials if the tax rate was $750,000 ($375,000 if you are married filing separately) of
the same as the general sales tax rate. For information on that debt. If you also have qualifying debt subject to the $1
figuring your deduction, see the Instructions for Sched- million ($500,000 if you are married filing separately) limi-
ule A (Form 1040). 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
debt taken out after December 15, 2017, is reduced by
! general sales taxes, if elected instead of income
CAUTION taxes, is limited to $10,000 ($5,000 if married fil- the 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-
tion applies, your loan may be treated in the same manner
If you elect to deduct the sales taxes paid on your 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
($375,000 or less if you are married filing separately).
Home Mortgage Interest
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
interest paid at settlement, points, and Form 1098. figure your deduction.
Most home buyers take out a mortgage (loan) to buy
Refund of home mortgage interest. If you receive a re-
their home. They then make monthly payments to either
fund of home mortgage interest that you deducted in an
the mortgage holder or someone collecting the payments
earlier year and that reduced your tax, you must generally
for the mortgage holder.
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 if you itemize your deductions amount of the refund will usually be shown on the mort-
on Schedule A (Form 1040). However, your deduction gage interest statement you receive from your mortgage
may be limited. See Limits on home mortgage interest lender. See Mortgage Interest Statement, later.
next 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, regard-
figure your deduction. Also see Pub. 936 if you later refi- less of how the loan is labeled. The loan can be a first or
nance your mortgage or buy a second home. second mortgage, a home improvement loan, a home
Limit for loan proceeds not used to buy, build, or equity loan, or a refinanced mortgage.
substantially improve your home. You can only de-
duct home mortgage interest to the extent that the loan
proceeds from your home mortgage are used to buy,
build, or substantially improve the home securing the loan.

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Interest paid on home mortgage proceeds is only gage interest the same way that is shown for figuring your
! deductible to the extent the loan proceeds were share of real estate taxes in the Example under Division of
CAUTION used to buy, build, or substantially improve your real estate taxes, earlier. For more information on cooper-
home. atives, see Special Rule for Tenant-Stockholders in Coop-
erative Housing Corporations in Pub. 936.
Prepaid interest. If you pay interest in advance for a pe- Refund of cooperative's mortgage interest. You
riod that goes beyond the end of the tax year, you must must reduce your mortgage interest deduction by your
spread this interest over the tax years to which it applies. share of any cash portion of a patronage dividend that the
Generally, you can deduct in each year only the interest cooperative receives. The patronage dividend is a partial
that qualifies as home mortgage interest for that year. An refund to the cooperative housing corporation of mortgage
exception (discussed later) applies to points. interest it paid in a prior year.
If you receive a Form 1098 from the cooperative hous-
Late payment charge on mortgage payment. You can
ing corporation, the form should show only the amount
deduct as home mortgage interest a late payment charge
you can deduct.
if it wasn't for a specific service in connection with your
mortgage loan. SBA disaster home loans. Interest paid on disaster
home loans from the Small Business Administration (SBA)
Mortgage prepayment penalty. If you pay off your
is deductible as mortgage interest if the requirements dis-
home mortgage early, you may have to pay a penalty. You
cussed earlier under Home Mortgage Interest are met.
can deduct that penalty as home mortgage interest, provi-
ded the penalty isn't for a specific service performed or
cost incurred in connection with your mortgage loan. Mortgage Interest Paid at Settlement

Ground rent. In some states (such as Maryland), you One item that normally appears on a settlement or closing
may buy your home subject to a ground rent. A ground statement is home mortgage interest.
rent is an obligation you assume to pay a fixed amount per
You can deduct the interest that you pay at settlement if
year on the property. Under this arrangement, you are
you itemize your deductions on Schedule A (Form 1040).
leasing (rather than buying) the land on which your home
This amount should be included in the mortgage interest
is located.
statement provided by your lender. See the discussion un-
Redeemable ground rents. If you make annual or der Mortgage Interest Statement, later. Also, if you pay in-
periodic rental payments on a redeemable ground rent, terest in advance, see Prepaid interest, earlier, and Points
you 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
The term “points” is used to describe certain charges paid,
15 years.
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- A borrower is treated as paying any points that a home
est in the land by paying a specified amount. 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
in the year paid. They are prepaid interest, so you must
Payments made to end the lease and buy the lessor's generally deduct them over the life (term) of the mortgage.
entire interest in the land aren't redeemable ground rents.
You can't deduct them. Exception. You can deduct the full amount of points in
the year paid if you meet all the following tests.
Nonredeemable ground rents. Payments on a non-
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 3. The points paid weren't more than the points gener-
a cooperative apartment, and the cooperative housing ally charged in that area.
corporation meets the conditions described earlier under
Special Rules for Cooperatives. In addition, you can treat
as home mortgage interest your share of the corporation's
deductible mortgage interest. Figure your share of mort-

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4. You use the cash method of accounting. This means can either deduct the full amount of points in the year paid
you report income in the year you receive it and de- or deduct them over the life of the loan, beginning in the
duct expenses in the year you pay them. Most year you get the loan. If you do not itemize your deduc-
individuals use this method. tions in the year you get the loan, you can spread the
points over the life of the loan and deduct the appropriate
5. The points weren't paid in place of amounts that are
amount in each future year, if any, when you do itemize
ordinarily stated separately on the settlement state-
your deductions.
ment, such as appraisal fees, inspection fees, title
fees, attorney fees, and property taxes. Home improvement loan. You can also fully deduct
6. The funds you provided at or before closing, plus any in the year paid points paid on a loan to substantially im-
points the seller paid, were at least as much as the prove your main home if you meet the first six tests listed
points charged. The funds you provided aren't re- earlier.
quired to have been applied to the points. They can Refinanced loan. If you use part of the refinanced
include a down payment, an escrow deposit, earnest mortgage proceeds to substantially improve your main
money, and other funds you paid at or before closing home and you meet the first six tests listed earlier, you
for any purpose. You can't have borrowed these can fully deduct the part of the points related to the im-
funds. provement in the year you paid them with your own funds.
7. You use your loan to buy or build your main home. You can deduct the rest of the points over the life of the
loan.
8. The points were figured as a percentage of the princi-
pal amount of the mortgage. Points not fully deductible in year paid. If you don’t
qualify under the exception to deduct the full amount of
9. The amount is clearly shown on the settlement state- points in the year paid (or choose not to do so), see Points
ment (such as the Uniform Settlement Statement, in Pub. 936 for the rules on when and how much you can
Form HUD-1) as points charged for the mortgage. deduct.
The points may be shown as paid from either your
funds or the seller's. Figure A. You can use Figure A as a quick guide to
see whether your points are fully deductible in the year
Note. If you meet all of the tests listed above and you paid.
itemize your deductions in the year you get the loan, you

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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 2014 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 2021.
year paid or over the life of the mortgage. For information
Dan prepaid his mortgage in full in 2022. He can de-
about the tax treatment of these amounts and other settle-
duct the remaining $1,400 of points in 2022.
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
loan placement fees that the seller pays to the lender to the year. Instead, deduct them over the term of the new
arrange financing for the buyer. loan.
Treatment by seller. The seller can't deduct these
Form 1098. The mortgage interest statement you receive
fees as interest. However, they are a selling expense that
should show not only the total interest paid during the
reduces the seller's amount realized. See Pub. 523 for
year, but also your deductible points paid during the year.
more information.
See Mortgage Interest Statement, later.
Treatment by buyer. The buyer treats seller-paid
points as if the buyer had paid them. If all the tests listed Where To Deduct Home Mortgage Interest
earlier under Exception are met, the buyer can deduct the
points in the year paid. If any of those tests aren't met, the Enter on Schedule A (Form 1040), line 8a, the home mort-
buyer must deduct the points over the life of the loan. gage interest and points reported to you on Form 1098
The buyer must also reduce the basis of the home by (discussed next). If you didn't receive a Form 1098, enter
the amount of the seller-paid points. For more information your deductible interest on line 8b, and any deductible
about the basis of your home, see Basis, later. points on line 8c. See Table 1 for a summary of where to
deduct home mortgage interest and state and local real
Funds provided are less than points. If you meet all estate taxes.
the tests listed earlier under Exception except that the
funds you provided were less than the points charged to If you paid home mortgage interest to the person from
you (test 6), you can deduct the points in the year paid up whom you bought your home, show that person's name,
to the amount of funds you provided. In addition, you can address, and social security number (SSN) or employer
deduct any points paid by the seller. identification number (EIN) on the dotted lines next to
line 8b. The seller must give you this number and you
Example 1. When you took out a $100,000 mortgage must give the seller your SSN. Form W-9, Request for
loan to buy your home in December, you were charged Taxpayer Identification Number and Certification, can be
one point ($1,000). You meet all the tests for deducting used for this purpose. Failure to meet either of these re-
points in the year paid (see Exception, earlier), except the quirements may result in a $50 penalty for each failure.
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
certain points during the year on any one mortgage to a 1098 showing the interest that was paid during the year,
mortgage holder in the course of that holder's trade or attach a statement to your paper return explaining this.
business, you should receive a Form 1098 or similar Show how much of the interest each of you paid, and give
statement from the mortgage holder. The statement will the name and address of the person who received the
show the total interest paid on your mortgage during the form. Deduct your share of the interest on Schedule A
year. If you bought a main home during the year, it will (Form 1040), line 8b, and enter “See attached” to the right
also show the deductible points you paid and any points of that line.
you can deduct 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 If the amount of your mortgage is more than the cost of
statement to your return explaining the difference. Enter the home plus the cost of any substantial improvements,
“See 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-
Home acquisition debt limit. The total amount you can
ernmental unit, or a cooperative housing corporation. If a
treat as home acquisition debt at any time on your home
statement comes from a cooperative housing corporation,
cannot be more than $1 million ($500,000 if married filing
it will generally show your share of interest.
separately). However, for tax years beginning after De-
cember 31, 2017, and before January 1, 2026, there is a
Your mortgage interest statement for 2022 should be further limitation. If you purchased your home during this
provided or sent to you by January 31, 2023. If it is mailed, time, the total amount you can treat as home acquisition
you should allow adequate time to receive it before con- debt at any time on your home generally cannot be more
tacting the mortgage holder. A copy of this form will also than $750,000 ($375,000 if married filing separately).
be sent to the IRS.
Discharges of qualified principal residence indebted-
Example. You bought a new home on May 3. You ness. You can exclude from gross income any dis-
paid no points on the purchase. During the year, you charges of qualified principal residence indebtedness
made mortgage payments that included $4,480 deducti- made after 2006 and in most cases before 2026. You
ble interest on your new home. The settlement sheet for must reduce the basis of your principal residence (but not
the purchase of the home included interest of $620 for 29 below zero) by the amount you exclude.
days in May. The mortgage statement you receive from
the lender includes total interest of $5,100 ($4,480 + Principal residence. Your principal residence is the
$620). You can deduct the $5,100 if you itemize your de- home where you ordinarily live most of the time. You can
ductions. have only one principal residence at any one time.
Refund of overpaid interest. If you receive a refund of Qualified principal residence indebtedness. This
mortgage interest you overpaid in a prior year, you will indebtedness is a mortgage that you took out to buy,
generally receive a Form 1098 showing the refund in build, or substantially improve your principal residence
box 4. Generally, you must include the refund in income in and that is secured by that residence. If the amount of
the year you receive it. See Refund of home mortgage in- your original mortgage is more than the cost of your princi-
terest, earlier, under Home Mortgage Interest. pal residence plus the cost of substantial improvements,
qualified principal residence indebtedness can’t be more
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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than the cost of your principal residence plus improve- You must contact the appropriate government
ments. TIP agency about getting an MCC before you get a
Any debt secured by your principal residence that you mortgage and buy your home. Contact your state
use to refinance qualified principal residence indebted- or local housing finance agency for information about the
ness is qualified principal residence indebtedness up to availability of MCCs in your area.
the amount of your old mortgage principal just before the
refinancing. Additional debt incurred to substantially im- How to claim the credit. To claim the credit, complete
prove your principal residence is also qualified principal Form 8396 and attach it to your Form 1040, 1040-SR, or
residence indebtedness. 1040-NR. Include the credit in your total for Schedule 3
Amount you can exclude. You can only exclude debt (Form 1040), line 6g.
discharged after 2006 and in most cases before 2026.
Reducing your home mortgage interest deduction. If
The most you can exclude is $750,000 ($375,000 if mar-
you itemize your deductions on Schedule A (Form 1040),
ried filing separately). You can’t exclude any amount that
you must reduce your home mortgage interest deduction
was discharged because of services performed for the
by the amount of the mortgage interest credit shown on
lender or on account of any other factor not directly rela-
Form 8396, line 3. You must do this even if part of that
ted either to a decline in the value of your residence or to
amount is to be carried forward to 2022.
your financial condition.
Ordering rule. If only a part of a loan is qualified prin- Selling your home. If you purchase a home after 1990
cipal residence indebtedness, you can exclude only the using an MCC, and you sell that home within 9 years, you
amount of the discharge that is more than the amount of may have to recapture (repay) all or part of the benefit you
the loan (immediately before the discharge) that is not received from the MCC program. For additional informa-
qualified principal residence indebtedness. tion, see Paying Back Credits and Subsidies in Pub. 523.

Qualified Home Figuring the Credit

This means your main home or your second home. A Figure your credit on Form 8396.
home includes a house, condominium, cooperative, mo-
bile home, house trailer, boat, or similar property that has Mortgage not more than certified indebtedness. If
sleeping, cooking, and toilet facilities. your mortgage loan amount is equal to (or smaller than)
the certified indebtedness amount shown on your MCC,
Main home. You can have only one main home at any enter on Form 8396, line 1, all the interest you paid on
one time. This is the home where you ordinarily live most your mortgage during the year.
of the time.
Mortgage more than certified indebtedness. If your
Second home and other special situations. If you mortgage loan amount is larger than the certified indebt-
have a second home, use part of your home for other than edness amount shown on your MCC, you can figure the
residential living (such as a home office), rent out part of credit on only part of the interest you paid. To find the
your home, or are having your home constructed, see amount to enter on line 1, multiply the total interest you
Qualified Home in Pub. 936. paid during the year on your mortgage by the following
fraction.

Mortgage Interest Credit Mortgage Larger than Certified
Indebtedness
The mortgage interest credit is intended to help lower-in-
Certified indebtedness amount on your MCC
come individuals afford home ownership. If you qualify,
you can claim the credit on Form 8396 each year for part Original amount of your mortgage
of the home mortgage interest you pay.
The fraction won’t change as long as you are entitled to
Who qualifies. You may be eligible for the credit if you take the mortgage interest credit.
were issued a qualified Mortgage Credit Certificate (MCC)
from your state or local government. Generally, an MCC is Example. Emily bought a home this year. Her mort-
issued only in connection with a new mortgage for the pur- gage loan is $125,000. The certified indebtedness amount
chase of your main home. on her MCC is $100,000. She paid $7,500 interest this
year. Emily figures the interest to enter on Form 8396,
The MCC will show the certificate credit rate you will line 1, as follows:
use to figure your credit. It will also show the certified in-
debtedness amount. Only the interest on that amount $100,000
qualifies for the credit. See Figuring the Credit, later. = 80% (0.80)
$125,000
$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 Credit, John and George used the entire $2,000 credit.
a joint return) hold an interest in the home to which the The excess
MCC relates, the credit must be divided based on the in-
terest 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. If you buy or build your home, your cost is
effect. It must show a separate calculation for the part of your basis. If you receive your home as a gift, your basis is
the year when the new MCC was in effect. Combine the usually the same as the adjusted basis of the person who
amounts from both calculations for line 3, enter the total gave you the property. If you inherit your home from a de-
on line 3 of the form, and enter “See attached” on the dot- cedent, different rules apply depending on the date of the
ted line next to line 2. decedent's death. Each of these topics is discussed later.

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

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

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estate taxes paid at settlement or closing under State and The following are some of the settlement fees and clos-
Local Real Estate Taxes, earlier, to figure the real estate ing costs that you can include in the original basis of your
taxes you paid or are considered to have paid. home.
If you pay any part of the seller's share of the real es-
• Abstract fees (abstract of title fees).
tate taxes (the taxes up to the date of sale), and the seller
didn't reimburse you, add those taxes to your basis in the • Charges for installing utility services.
home. You can't deduct them as taxes paid. • Legal fees (including fees for the title search and prep-
If the seller paid any of your share of the real estate aration of the sales contract and deed).
taxes (the taxes beginning with the date of sale), you can
still deduct those taxes. Don’t include those taxes in your • Recording fees.
basis. If you didn't reimburse the seller, you must reduce • Surveys.
your basis by the amount of those taxes.
• Transfer or stamp taxes.
Example 1. You bought your home on September 1, • Owner's title insurance.
2022. The property tax year in your area is the calendar
year, and the tax is due on August 15. The real estate • Any amount the seller owes that you agree to pay,
taxes on the home you bought were $1,275 for the year such as back taxes or interest, recording or mortgage
and had been paid by the seller on August 15. You didn't fees, cost for improvements or repairs, and sales
reimburse the seller for your share of the real estate taxes commissions.
from September 1 through December 31. You must re- If the seller actually paid for any item for which you are
duce the basis of your home by the $426 [(122 ÷ 365) × liable and for which you can take a deduction (such as
$1,275] the seller paid for you. You can deduct your $426 your share of the real estate taxes for the year of sale),
share of real estate taxes on your return for the year you you must reduce your basis by that amount unless you are
purchased your home. charged for it in the settlement.
Example 2. You bought your home on May 3, 2022. Items not added to basis and not deductible. Here
The property tax year in your area is the calendar year. are some settlement and closing costs that you can't de-
The taxes for the previous year are assessed on January duct or add to your basis.
2 and are due on May 31 and November 30. Under state 1. Fire insurance premiums.
law, the taxes become a lien on May 31. You agreed to
pay all taxes due after the date of sale. The taxes due in 2. Charges for using utilities or other services related to
2022 for 2021 were $1,375. The taxes due in 2023 for occupancy of the home before closing.
2022 will be $1,425. 3. Rent for occupying the home before closing.
You can't deduct any of the taxes paid in 2022 because
they relate to the 2021 property tax year and you didn't 4. Charges connected with getting or refinancing a mort-
own the home until 2022. Instead, you add the $1,375 to gage loan, such as:
the cost (basis) of your home. a. Loan assumption fees,
You owned the home in 2022 for 243 days (May 3 to
December 31), so you can take a tax deduction on your b. Cost of a credit report,
2023 return of $946 [(243 ÷ 365) × $1,425] paid in 2023
c. Fee for an appraisal required by a lender, and
for 2022. You add the remaining $479 ($1,425 − $946) of
taxes paid in 2023 to the cost (basis) of your home. d. Mortgage insurance premiums.
Settlement or closing costs. If you bought your home, Points paid by seller. If you bought your home after
you probably paid settlement or closing costs in addition April 3, 1994, you must reduce your basis by any points
to the contract price. These costs are divided between paid for your mortgage by the person who sold you your
you and the seller according to the sales contract, local home.
custom, or understanding of the parties. If you built your If you bought your home after 1990 but before April 4,
home, you probably paid these costs when you bought 1994, you must reduce your basis by seller-paid points
the land or settled on your mortgage. only if you deducted them. See Points, earlier, for the
The only settlement or closing costs you can deduct rules on deducting points.
are home mortgage interest and certain real estate taxes.
You deduct them in the year you buy your home if you Gift
itemize your deductions. You can add certain other settle-
ment or closing costs to the basis of your home. To figure the basis of property you receive as a gift, you
must know its adjusted basis (defined later) to the donor
Items added to basis. You can include in your basis just before it was given to you, its fair market value at the
the settlement fees and closing costs you paid for buying time it was given to you, and any gift tax paid on it.
your home. A fee is for buying the home if you would have
had to pay it even if you paid cash for the home. Fair market value. Fair market value (FMV) is the price
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 ceipt is the same as the donor's adjusted basis, plus the
knowledge of all the necessary facts. part of any federal gift tax paid that is due to the net in-
crease in value of the home.
Donor's adjusted basis is more than FMV. If someone
gave you your home and the donor's adjusted basis, when Part of federal gift tax due to net increase in value.
it was given to you, was more than the FMV, your basis at Figure the part of the federal gift tax paid that is due to the
the time of receipt is the same as the donor's adjusted ba- net increase in value of the home by multiplying the total
sis. federal gift tax paid by a fraction. The numerator (top part)
of the fraction is the net increase in the value of the home,
Disposition basis. If the donor's adjusted basis at the and the denominator (bottom part) is the value of the
time of the gift is more than the FMV, your basis (plus or home for gift tax purposes after reduction for any annual
minus any required adjustments; see Adjusted Basis, exclusion and marital or charitable deduction that applies
later) when you dispose of the property will depend on to the gift. The net increase in the value of the home is its
whether you have a gain or a loss. FMV minus the adjusted basis of the donor.
• Your basis for figuring a gain is the same as the do-
nor's adjusted basis. Pub. 551 gives more information, including examples,
on figuring your basis when you receive property as a gift.
• Your basis for figuring a loss is the FMV when you re-
ceived the gift.
Inheritance
If you use the donor's adjusted basis to figure a gain and it
results in a loss, then you must use the FMV (at the time Your basis in a home you inherited is generally the FMV of
of the gift) to refigure the loss. However, if using the FMV the home on the date of the decedent's death or on the al-
results in a gain, then you have neither a gain nor a loss. ternative valuation date if the personal representative for
the estate chooses to use alternative valuation.
Example 1. Andrew received a house as a gift from
Ishmael (the donor). At the time of the gift, the home had If an estate tax return was filed, your basis is generally
an FMV of $80,000. Ishmael's adjusted basis was the value of the home listed on the estate tax return. If you
$100,000. After he received the house, no events occur- received a Schedule A (Form 8971) statement from an ex-
red to increase or decrease the basis. If Andrew sells the ecutor of an estate or other person required to file an es-
house for $120,000, he will have a $20,000 gain because tate tax return after July 2015, you may be required to re-
he must use the donor's adjusted basis ($100,000) at the port a basis consistent with the estate tax value of the
time of the gift as his basis to figure the gain. 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 mation provided by the executor or see Pub. 4895, Tax
FMV. If someone gave you your home after 1976 and the Treatment of Property Acquired From a Decedent Dying
donor's adjusted basis, when it was given to you, was in 2010, available at IRS.gov/Pub/IRS-Prior/
equal to or less than the FMV, your basis at the time of re- p4895-2011.pdf.

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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.
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.
Adjusted Basis Repairs include repainting your home inside or outside,
fixing your gutters or floors, fixing leaks or plastering, and
While you own your home, various events may take place replacing broken window panes. You can't deduct repair
that can change the original basis of your home. These costs and generally can't add them to the basis of your
events can increase or decrease your original basis. The home.
result is called adjusted basis. See Table 3 for a list of However, repairs that are done as part of an extensive
some of the items that can adjust your basis. remodeling or restoration of your home are considered im-
provements. You add them to the basis of your home.
Improvements. An improvement materially adds to the Records to keep. You can use Table 4 as a guide to
value of your home, considerably prolongs its useful life, help you keep track of improvements to your home. Also
or adapts it to new uses. You must add the cost of any im- see Keeping Records below.
provements to the basis of your home. You can't deduct
these costs. Energy conservation subsidy. If a public utility gives
Improvements include putting a recreation room in your you (directly or indirectly) a subsidy for the purchase or in-
unfinished basement, adding another bathroom or bed- stallation of an energy conservation measure for your
room, putting up a fence, putting in new plumbing or wir- home, don’t include the value of that subsidy in your in-
ing, installing a new roof, and paving your driveway. come. You must reduce the basis of your home by that
value.
Amount added to basis. The amount you add to your An energy conservation measure is an installation or
basis for improvements is your actual cost. This includes modification primarily designed to reduce consumption of
all costs for material and labor, except your own labor, electricity or natural gas or to improve the management of
and all expenses related to the improvement. For exam- energy demand.
ple, if you had your lot surveyed to put up a fence, the cost
of the survey is a part of the cost of the fence. Adoption tax benefits. If you claim an adoption credit
You must also add to your basis state and local assess- for the cost of improvements you added to the basis of
ments for improvements such as streets and sidewalks if your home, decrease the basis of your home by the credit
they increase the value of the property. These assess- allowed. This also applies to amounts you received under
ments are discussed earlier under State and Local Real an employer's adoption assistance program and excluded
Estate Taxes. from income. For more information, see Form 8839, Quali-
fied Adoption Expenses.
Improvements no longer part of home. Your
home's adjusted basis doesn't include the cost of any im-
provements that are replaced and are no longer part of
the home. Keeping Records
Example. You put wall-to-wall carpeting in your home Keeping full and accurate records is vital to prop-
15 years ago. Later, you replaced that carpeting with new erly report your income and expenses, to support
wall-to-wall carpeting. The cost of the old carpeting you RECORDS your deductions and credits, and to know the ba-
replaced is no longer part of your home's adjusted basis. sis or adjusted basis of your home. These records include
your purchase contract and settlement papers if you
Repairs versus improvements. A repair keeps your bought the property, or other objective evidence if you ac-
home in an ordinary, efficient operating condition. It quired it by gift, inheritance, or similar means. You should
doesn't add to the value of your home or prolong its life.

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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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                                                                    Using online tools to help prepare your return.       Go to 
                                                                    IRS.gov/Tools for the following.
How To Get Tax Help
                                                                    • The Earned Income Tax Credit Assistant IRS.gov/ (
If you have questions about a tax issue; need help prepar-            EITCAssistant) determines if you’re eligible for the 
ing your tax return; or want to download free publications,           earned income credit (EIC).
forms, or instructions, go to IRS.gov to find resources that        • The Online EIN Application IRS.gov/EIN ( ) helps you 
can help you right away.                                              get an employer identification number (EIN) at no 
                                                                      cost.
Preparing and filing your tax return.  After receiving all 
your wage and earnings statements (Forms W-2, W-2G,                 • The Tax Withholding Estimator IRS.gov/W4app (      ) 
1099-R,  1099-MISC,  1099-NEC,  etc.);  unemployment                  makes it easier for you to estimate the federal income 
compensation statements (by mail or in a digital format) or           tax you want your employer to withhold from your pay-
other  government  payment  statements  (Form  1099-G);               check. This is tax withholding. See how your withhold-
and  interest,  dividend,  and  retirement  statements  from          ing affects your refund, take-home pay, or tax due.
banks and investment firms (Forms 1099), you have sev-              • The First-Time Homebuyer Credit Account Look-up 
eral options to choose from to prepare and file your tax re-          (IRS.gov/HomeBuyer) tool provides information on 
turn.  You  can  prepare  the  tax  return  yourself,  see  if  you   your repayments and account balance.
qualify for free tax preparation, or hire a tax professional to 
prepare your return.                                                • The Sales Tax Deduction Calculator IRS.gov/ (
                                                                      SalesTax) figures the amount you can claim if you 
Free options for tax preparation.    Go to IRS.gov to see             itemize deductions on Schedule A (Form 1040).
your options for preparing and filing your return online or 
                                                                       Getting  answers  to  your  tax  questions.  On 
in your local community, if you qualify, which include the 
                                                                       IRS.gov,  you  can  get  up-to-date  information  on 
following.
                                                                       current events and changes in tax law.
• Free File. This program lets you prepare and file your 
                                                                    • IRS.gov/Help: A variety of tools to help you get an-
  federal individual income tax return for free using 
                                                                      swers to some of the most common tax questions.
  brand-name tax-preparation-and-filing software or 
  Free File fillable forms. However, state tax preparation          • IRS.gov/ITA: The Interactive Tax Assistant, a tool that 
  may not be available through Free File. Go to IRS.gov/              will ask you questions and, based on your input, pro-
  FreeFile to see if you qualify for free online federal tax          vide answers on a number of tax law topics.
  preparation, e-filing, and direct deposit or payment op-          • IRS.gov/Forms: Find forms, instructions, and publica-
  tions.                                                              tions. You will find details on the most recent tax 
• VITA. The Volunteer Income Tax Assistance (VITA)                    changes and interactive links to help you find answers 
  program offers free tax help to people with                         to your questions.
  low-to-moderate incomes, persons with disabilities,               • You may also be able to access tax law information in 
  and limited-English-speaking taxpayers who need                     your electronic filing software.
  help preparing their own tax returns. Go to IRS.gov/
  VITA, download the free IRS2Go app, or call 
  800-906-9887 for information on free tax return prepa-            Need someone to prepare your tax return?             There are 
  ration.                                                           various  types  of  tax  return  preparers,  including  enrolled 
                                                                    agents, certified public accountants (CPAs), accountants, 
• TCE. The Tax Counseling for the Elderly (TCE) pro-
                                                                    and many others who don’t have professional credentials. 
  gram offers free tax help for all taxpayers, particularly 
                                                                    If you choose to have someone prepare your tax return, 
  those who are 60 years of age and older. TCE volun-
                                                                    choose that preparer wisely. A paid tax preparer is:
  teers specialize in answering questions about pen-
  sions and retirement-related issues unique to seniors.            • Primarily responsible for the overall substantive accu-
  Go to IRS.gov/TCE, download the free IRS2Go app,                    racy of your return,
  or call 888-227-7669 for information on free tax return           • Required to sign the return, and
  preparation.
                                                                    • Required to include their preparer tax identification 
• MilTax. Members of the U.S. Armed Forces and                        number (PTIN).
  qualified veterans may use MilTax, a free tax service 
  offered by the Department of Defense through Military             Although  the  tax  preparer  always  signs  the  return, 
  OneSource. For more information, go to                            you're ultimately responsible for providing all the informa-
  MilitaryOneSource MilitaryOneSource.mil/MilTax (    ).            tion  required  for  the  preparer  to  accurately  prepare  your 
  Also, the IRS offers Free Fillable Forms, which can               return.  Anyone  paid  to  prepare  tax  returns  for  others 
  be  completed  online  and  then  filed  electronically  re-      should have a thorough understanding of tax matters. For 
  gardless of income.                                               more information on how to choose a tax preparer, go to 
                                                                    Tips for Choosing a Tax Preparer on IRS.gov.

                                                                    Coronavirus. Go  to IRS.gov/Coronavirus  for  links  to  in-
                                                                    formation on the impact of the coronavirus, as well as tax 

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relief available for individuals and families, small and large Note. Form 9000, Alternative Media Preference, or
businesses, and tax-exempt organizations. Form 9000(SP) allows you to elect to receive certain types
of written correspondence in the following formats.
Employers can register to use Business Services On-
line. The Social Security Administration (SSA) offers on- • Standard Print.
line service at SSA.gov/employer for fast, free, and secure • Large Print.
online W-2 filing options to CPAs, accountants, enrolled Braille.
•
agents, and individuals who process Form W-2, Wage
and Tax Statement, and Form W-2c, Corrected Wage and • Audio (MP3).
Tax Statement. • Plain Text File (TXT).
IRS social media. Go to IRS.gov/SocialMedia to see the • Braille Ready File (BRF).
various social media tools the IRS uses to share the latest
Disasters. Go to Disaster Assistance and Emergency
information on tax changes, scam alerts, initiatives, prod-
Relief for Individuals and Businesses to review the availa-
ucts, and services. At the IRS, privacy and security are
ble disaster tax relief.
our highest priority. We use these tools to share public in-
formation with you. Don’t post your social security number Getting tax forms and publications. Go to IRS.gov/
(SSN) or other confidential information on social media Forms to view, download, or print all the forms, instruc-
sites. Always protect your identity when using any social tions, and publications you may need. Or, you can go to
networking site. IRS.gov/OrderForms to place an order.
The following IRS YouTube channels provide short, in-
formative videos on various tax-related topics in English, Getting tax publications and instructions in eBook
Spanish, and ASL. format. You can also download and view popular tax
• Youtube.com/irsvideos. publications and instructions (including the Instructions for
Form 1040) on mobile devices as eBooks at IRS.gov/
• Youtube.com/irsvideosmultilingua. eBooks.
• Youtube.com/irsvideosASL.
Note. IRS eBooks have been tested using Apple's
Watching IRS videos. The IRS Video portal iBooks for iPad. Our eBooks haven’t been tested on other
(IRSVideos.gov) contains video and audio presentations dedicated eBook readers, and eBook functionality may
for individuals, small businesses, and tax professionals. not operate as intended.

Online tax information in other languages. You can Access your online account (individual taxpayers
find information on IRS.gov/MyLanguage if English isn’t only). Go to IRS.gov/Account to securely access infor-
your native language. mation about your federal tax account.
• View the amount you owe and a breakdown by tax
Free Over-the-Phone Interpreter (OPI) Service. The
year.
IRS is committed to serving our multilingual customers by
offering OPI services. The OPI Service is a federally fun- • See payment plan details or apply for a new payment
ded program and is available at Taxpayer Assistance plan.
Centers (TACs), other IRS offices, and every VITA/TCE • Make a payment or view 5 years of payment history
return site. The OPI Service is accessible in more than and any pending or scheduled payments.
350 languages.
• Access your tax records, including key data from your
Accessibility Helpline available for taxpayers with most recent tax return, and transcripts.
disabilities. Taxpayers who need information about ac- • View digital copies of select notices from the IRS.
cessibility services can call 833-690-0598. The Accessi-
bility Helpline can answer questions related to current and • Approve or reject authorization requests from tax pro-
future accessibility products and services available in al- fessionals.
ternative media formats (for example, braille, large print, • View your address on file or manage your communi-
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cess to your IRS account. For help with tax law, refunds,
or account-related issues, go to IRS.gov/LetUsHelp. Tax Pro Account. This tool lets your tax professional
submit an authorization request to access your individual
taxpayer IRS online account. For more information, go to
IRS.gov/TaxProAccount.

Using direct deposit. The fastest way to receive a tax
refund is to file electronically and choose direct deposit,
which securely and electronically transfers your refund di-
rectly into your financial account. Direct deposit also
avoids the possibility that your check could be lost, stolen,
destroyed, or returned undeliverable to the IRS. Eight in

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10 taxpayers use direct deposit to receive their refunds. If • Electronic Funds Withdrawal: Schedule a payment
you don’t have a bank account, go to IRS.gov/ when filing your federal taxes using tax return prepara-
DirectDeposit for more information on where to find a tion software or through a tax professional.
bank or credit union that can open an account online.
• Electronic Federal Tax Payment System: Best option
Getting a transcript of your return. The quickest way for businesses. Enrollment is required.
to get a copy of your tax transcript is to go to IRS.gov/ • Check or Money Order: Mail your payment to the ad-
Transcripts. Click on either “Get Transcript Online” or “Get dress listed on the notice or instructions.
Transcript by Mail” to order a free copy of your transcript.
If you prefer, you can order your transcript by calling • Cash: You may be able to pay your taxes with cash at
a participating retail store.
800-908-9946.
• Same-Day Wire: You may be able to do same-day
Reporting and resolving your tax-related identity wire from your financial institution. Contact your finan-
theft issues. cial institution for availability, cost, and time frames.
• Tax-related identity theft happens when someone
Note. The IRS uses the latest encryption technology to
steals your personal information to commit tax fraud.
ensure that the electronic payments you make online, by
Your taxes can be affected if your SSN is used to file a
phone, or from a mobile device using the IRS2Go app are
fraudulent return or to claim a refund or credit.
safe and secure. Paying electronically is quick, easy, and
• The IRS doesn’t initiate contact with taxpayers by faster than mailing in a check or money order.
email, text messages (including shortened links), tele-
phone calls, or social media channels to request or What if I can’t pay now? Go to IRS.gov/Payments for
verify personal or financial information. This includes more information about your options.
requests for personal identification numbers (PINs), • Apply for an online payment agreement IRS.gov/ (
passwords, or similar information for credit cards, OPA) to meet your tax obligation in monthly install-
banks, or other financial accounts. ments if you can’t pay your taxes in full today. Once
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft you complete the online process, you will receive im-
Central webpage, for information on identity theft and mediate notification of whether your agreement has
data security protection for taxpayers, tax professio- been approved.
nals, and businesses. If your SSN has been lost or • Use the Offer in Compromise Pre-Qualifier to see if
stolen or you suspect you’re a victim of tax-related you can settle your tax debt for less than the full
identity theft, you can learn what steps you should amount you owe. For more information on the Offer in
take. Compromise program, go to IRS.gov/OIC.
• Get an Identity Protection PIN (IP PIN). IP PINs are
six-digit numbers assigned to taxpayers to help pre- Filing an amended return. Go to IRS.gov/Form1040X
vent the misuse of their SSNs on fraudulent federal in- for information and updates.
come tax returns. When you have an IP PIN, it pre-
Checking the status of your amended return. Go to
vents someone else from filing a tax return with your
IRS.gov/WMAR to track the status of Form 1040-X amen-
SSN. To learn more, go to IRS.gov/IPPIN.
ded returns.
Ways to check on the status of your refund.
Note. It can take up to 3 weeks from the date you filed
• Go to IRS.gov/Refunds. your amended return for it to show up in our system, and
processing it can take up to 16 weeks.
• Download the official IRS2Go app to your mobile de-
vice to check your refund status. Understanding an IRS notice or letter you’ve re-
• Call the automated refund hotline at 800-829-1954. ceived. Go to IRS.gov/Notices to find additional informa-
tion about responding to an IRS notice or letter.
Note. The IRS can’t issue refunds before mid-Febru-
ary for returns that claimed the EIC or the additional child Note. You can use Schedule LEP (Form 1040), Re-
tax credit (ACTC). This applies to the entire refund, not quest for Change in Language Preference, to state a pref-
just the portion associated with these credits. erence to receive notices, letters, or other written commu-
nications from the IRS in an alternative language. You
Making a tax payment. Go to IRS.gov/Payments for in- may not immediately receive written communications in
formation on how to make a payment using any of the fol- the requested language. The IRS’s commitment to LEP
lowing options. taxpayers is part of a multi-year timeline that is scheduled
• IRS Direct Pay: Pay your individual tax bill or estima- to begin providing translations in 2023. You will continue
ted tax payment directly from your checking or sav- to receive communications, including notices and letters,
ings account at no cost to you. in English until they are translated to your preferred lan-
guage.
• Debit or Credit Card: Choose an approved payment
processor to pay online or by phone.

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Contacting your local IRS office. Keep in mind, many • You face (or your business is facing) an immediate
questions can be answered on IRS.gov without visiting an threat of adverse action; or
IRS TAC. Go to IRS.gov/LetUsHelp for the topics people
• You’ve tried repeatedly to contact the IRS but no one
ask about most. If you still need help, IRS TACs provide
has responded, or the IRS hasn’t responded by the
tax help when a tax issue can’t be handled online or by
date promised.
phone. All TACs now provide service by appointment, so
you’ll know in advance that you can get the service you
need without long wait times. Before you visit, go to How Can You Reach TAS?

IRS.gov/TACLocator to find the nearest TAC and to check TAS has offices in every state, the District of Columbia,
hours, available services, and appointment options. Or, and Puerto Rico. Your local advocate’s number is in your
on the IRS2Go app, under the Stay Connected tab, local directory and at TaxpayerAdvocate.IRS.gov/
choose the Contact Us option and click on “Local Offices.” Contact-Us. You can also call them at 877-777-4778.

The Taxpayer Advocate Service (TAS) How Else Does TAS Help Taxpayers?
Is Here To Help You
TAS works to resolve large-scale problems that affect
What Is TAS? many taxpayers. If you know of one of these broad issues,
report it to them at IRS.gov/SAMS.
TAS is an independent organization within the IRS that
helps taxpayers and protects taxpayer rights. Their job is
TAS for Tax Professionals
to ensure that every taxpayer is treated fairly and that you
know and understand your rights under the Taxpayer Bill TAS can provide a variety of information for tax professio-
of Rights. nals, including tax law updates and guidance, TAS pro-
grams, and ways to let TAS know about systemic prob-
How Can You Learn About Your Taxpayer lems you’ve seen in your practice.
Rights?
Low Income Taxpayer Clinics (LITCs)
The Taxpayer Bill of Rights describes 10 basic rights that
all taxpayers have when dealing with the IRS. Go to LITCs are independent from the IRS. LITCs represent in-
TaxpayerAdvocate.IRS.gov to help you understand what dividuals whose income is below a certain level and need
these rights mean to you and how they apply. These are to resolve tax problems with the IRS, such as audits, ap-
your rights. Know them. Use them. peals, and tax collection disputes. In addition, LITCs can
provide information about taxpayer rights and responsibili-
What Can TAS Do for You? ties in different languages for individuals who speak Eng-
lish as a second language. Services are offered for free or
TAS can help you resolve problems that you can’t resolve a small fee for eligible taxpayers. To find an LITC near
with the IRS. And their service is free. If you qualify for you, go to TaxpayerAdvocate.IRS.gov/about-us/Low-
their assistance, you will be assigned to one advocate Income-Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low
who will work with you throughout the process and will do Income Taxpayer Clinic List.
everything possible to resolve your issue. TAS can help
you if:
• Your problem is causing financial difficulty for you,
your family, or your business;

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

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