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is loan modification fees paid to third party tax deductible

by alvzr586 from Middletown, Rhode Island. Feb 26th 2018 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Much more info needed to answer your question, and with the new tax laws for 2018, things might have changed.. Also, we need to know if you are talking about your primary residence, 2nd home, or investment property as the rules vary.. You can read IRS Publications 936 and 530.. this relates to deductible mortgage fee's.. . Since you did a loan modification, then I can only assume you're talking about your primary residence, not a 2nd home or investment.. so those are the tax rules that will apply. Under these rules, 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 an APR Fee... which typically is not the case with modifications. Typically, loan mod fees from third party services are 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 pro. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Feb 27th 2018
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