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can i deduct the fees for a loan modification

i did a loan mod for $3000, can I write the fees as points or interest..... by ssawyer62 from Costa Mesa, California. Jul 19th 2010 Reply

Brett Pehrson (brettpehrson)
#19 ranked lender in Utah - 228 contributions

This is a question best answered by your tax advisor/tax preparer. I am also a tax preparer, though, so I'll give you my general understanding of the rules you're curious about. First, the information you are looking for can be found in IRS Publications 936 and 530. Since you did a loan modification, it is my assumption you're talking about your primary residence, so those are the tax rules that will apply. That being the case, you'll be able to see that mortgage interest is typically deductible on the Schedule A, depending on your circumstances; that won't change with your modified mortgage. As for the fees, they are only deductible when they are expressed as a percentage of the loan amount, usually as an origination fee or discount fee (both are known as points), which typically is not the case with modifications. Modification fees from third party services would most likely be classified as legal fees, and those are only deductible when it relates to your income. There may be another way, specific to your circumstances, that you can deduct these fees, but that will need to be determined by your tax advisor/preparer.

Jul 19th 2010
Matt Davis (Matt Davis)
#152 ranked lender in California - 52 contributions

That would definitely be a question for your accountant, CPA or tax preparer, however, as Brett mentions below, because modification fees are not points paid during a refinance or purchase and it is not interest, I would guess no.

Jul 22nd 2010
David Drakeford (david_drakeford)
#0 ranked lender in California - 63 contributions

My first guess would be no. However, you will want to consult with your/a tax prepare to get the definite answer.

Mar 24th 2014
Mike Silkworth (msilkw_195_870)
#31 ranked lender in Michigan - 531 contributions

Talk to your CPA, Accountant or Tax Preparer on this question.

Apr 5th 2014
Jesse Stroup (jessestroup)
#4 ranked lender in Idaho - 593 contributions

With Loan modification it would be best to contact your CPA to talk about any updates tax laws for wright offs. Also call up your past lender to get the closing statement so you can show all the fees from the last loan.Jesse Stroup Mortgage Professional | Mortgage ManTwitter: @jessestroup

May 22nd 2015
Kay Cleland (
#31 ranked lender in Colorado - 229 contributions

Hello,You will definitely need to contact your CPA/Accountant for any tax questions. thank you

Feb 29th 2016
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