Capitol Title - Homebuyer Resources

Hud Reference	Item Description	Residence Purchase Refinance		Second Home Purchase Refinance		Business or Rental Purchase Refinance
101	Contract Price	Cost	Cost	Cost	Cost	Cost	Cost
106-107	City/Town/County Taxes	1 Deduct	N/A	1 Deduct	N/A	1 Deduct	N/A
108	Assessments-Improvements	Cost	Cost	Cost	Cost	Cost	Cost
108	Assessments-Maintenance, Usage	N/A	N/A	N/A	N/A	Deduct	Deduct
109-112	Payoff of Existing Loans - Interest Portion Only	N/A	Deduct	N/A	Deduct	N/A	Deduct
210-211	City/Town/County Taxes	Income	N/A	Income	N/A	Income	N/A
210-211	City/Town/County Taxes	Lines 210-211 Reduce Real Estate Taxes or Increase Income
212	Assessments-Improvements	Reduction of Cost	Reduction of Cost	Reduction of Cost	Reduction of Cost	Reduction of Cost	Reduction of Cost
212	Assessments-Maintenance, Usage	N/A	N/A	N/A	N/A	Income	Income
701-705	Commissions	Cost	N/A	Cost	N/A	Cost	N/A
801-802	Loan Origination/ Discount (Points)	2 - Deduct	3 - Amortize	Amortize	Amortize	Amortize	Amortize
803-811	Other Loan Costs	N/A	N/A	N/A	N/A	Amortize	Amortize
901	Interest Adjustment (If not included on form 1098)	Deduct	Deduct	Deduct	Deduct	Deduct	Deduct
902-905	Mortgage and Hazard Insurance	N/A	N/A	N/A	N/A	Deduct	Deduct
1001-1008	Reserves Deposited With Lender	N/A	N/A	N/A	N/A	4 N/A	4 N/A
1101-1113	Title Charges	Cost	N/A	Cost	N/A	Cost	Amortize
1201	Recording Fees	Cost	N/A	Cost	N/A	Cost	Amortize
1202-1205	City/County and State Tax Stamps & Transfer Taxes	Cost	N/A	Cost	N/A	Cost	Amortize
1301-1305	Additional Settlement Charges	Cost	N/A	Cost	N/A	Cost	Amortize
Notes: 1) Deduct only amounts applicable to the time period purchaser owns the property; remainder is added to cost. 2) Deductible if all of the following conditions are met: a. Designated on the Uniform Settlement Statement as points incurred in connection with the indebtedness. b. Computed as a percentage of the amount borrowed. c. Charged under established business practice of charging points for loans in the area in which the residence is located. d. Paid in connection with the acquisition of principal residence and the loan is secured by such residence. e. Paid directly by the taxpayer. If paid by the seller after 12/31/90, points are deductible by the buyer. However, the basis in the residence must be reduced by the amount deducted by the buyer that was paid for by the seller. The points must be provided by the funds of the taxpayer (i.e. cash downpayments, escrow deposits and/or earnest money applied at closing must equal or exceed the amount to be deducted at as points) and not from proceeds of the loan. 3) Deductible if original loan was short-term financing used to finance acquisition of principal residence (see also 2 above) 4) Deductible when actually paid by lender from funds withheld.
Prepared By AND Reprinted with permission of: Liptz, Roberts and Marquez, Chartered, Certified Public Accountants, 5530 Wisconsin Avenue, Suite 1100, Chevy Chase, MD 20815 Phone: (301)657-2900 Fax: (301)657-2166.
This information is for general information purposes and should not be relied upon in a specific transaction without first consulting Liptz, Roberts and Marquez, Chartered or a professional tax advisor.