Settlement Statement

[veritas]

The answers are

in TTB.

Have you purchased it?

[POCAHONTAS]

In the NCPE 2008 Individual Tax lecture book - Chapter 12 provides all the information you need to determine cost basis, tax deductible items and non-deductible items.
P. 12-8 is what I used to prepare my worksheet schedule.

can you please tell me where I can obtain the NCPE 2008 individual tax lecture book from???

thanks

[POCAHONTAS]

points are shown on the settlement statement or the closing statement and are normally reported as loan origination fees.

[BOB W]

Take some time and review the section headings. Like on page 2 there is a section that only deals with estimating escrow requirements. Escrow issues have no bearing on basis or deductions.

Again locate each section and try to understand the the issues in each section.

[Uncle Sam]

HUD-1 Settlement Statement

In the NCPE 2008 Individual Tax lecture book - Chapter 12 provides all the information you need to determine cost basis, tax deductible items and non-deductible items.
P. 12-8 is what I used to prepare my worksheet schedule.

[Gene V]

Your best answers are as Sandy stated. Go to The Tax Book 6-2. It tells you pretty much what you want to know. The synopsis is …. You can deduct the Real Estate taxes from the Settlement sheet on Schedule A. The allowed amount usually is figured out already for you either by looking on the settlement sheet or an attached paper showing the break down of real estate tax percentage amount deductible to each … the buyer and the seller. That is usually all that you can deduct from the settlement sheet. The mortgage interest, points paid, etc. you will not find on the settlement sheet.

I agree with TaxLadyinPA, except the point or loan fees are not always on the 1098, see
the instruction for line 12 for Schedule A--reprinted here

Line 12
Points Not Reported on
Form 1098
Points are shown on your settlement state-
ment. Points you paid only to borrow
money are generally deductible over the
life of the loan. See Pub. 936 to figure the
amount you can deduct. Points paid for
other purposes, such as for a lender’s serv-
ices, are not deductible.

[TaxLadyinPA]

Thanks, Sandy for that information, however I am still confused to what increase basis for the buyer means. Can I take these deductions on the schedule A. This is new to me and I want to make sure I understand to give my client all tax deductions they can legally take without the fear of an audit.

Again thanks

Your best answers are as Sandy stated. Go to The Tax Book 6-2. It tells you pretty much what you want to know. The synopsis is …. You can deduct the Real Estate taxes from the Settlement sheet on Schedule A. The allowed amount usually is figured out already for you either by looking on the settlement sheet or an attached paper showing the break down of real estate tax percentage amount deductible to each … the buyer and the seller. That is usually all that you can deduct from the settlement sheet. The mortgage interest, points paid, etc. you will not find on the settlement sheet. They will come from the mortgage company on a 1098 mortgage interest paid statement.

For the seller …. You need to figure IF there is a taxable profit for the sale of property. For the Buyer … you can takes notes to keep in your file as to the basis of purchased property. Then if the buyer sells a few years down the road you will have their beginning basis ready and will only need to add the things they may have done over the previous years i.e. remodeling, building, etc. to increase the basis. (use TTB 6-2 as your guide)

As you sound like you are a new tax preparer and inexperienced hang in there ….. reading this board will give you so much knowledge …. Even if it doesn't pertain to any returns you do ….. there are so many people here that will give you tidbits ….. so READ READ READ…..

But BEWARE …. February is a bad month to ask questions … we are all cranky LOL everyone is stressed with all the "hurry up and get mine done" clients …. So we don't always take the time to try to answer your questions. Good luck .. keep reading and keep asking your questions. Welcome to TTB board!! {wait until you see the remarks this paragraph brings to this board} - - - - [Be nice everyone]

[erchess]

I think you need help

from someone who is with you. If there is a more experienced person in your office go to them and if not then you probably need to either send the client to another practice or go to another practitioner for help, and expect to pay for their time. You appear to me to need more help than is possible in an online forum. I am sorry I cannot do more for you.

[ELON]

See the discussion posted at
http://www.thetaxbook.com/forums/showthread.php?t=10641 and also

TTB page 6-2

Sandy

Thanks, Sandy for that information, however I am still confused to what increase basis for the buyer means. Can I take these deductions on the schedule A. This is new to me and I want to make sure I understand to give my client all tax deductions they can legally take without the fear of an audit.

Again thanks

[S T]

Closing Statement

See the discussion posted at
http://www.thetaxbook.com/forums/showthread.php?t=10641 and also

TTB page 6-2

Sandy

[ELON]

Do anyone know the breakdown of a settlement statement of what is deductiable for a buyer?
Also, what is deductible for a seller?
can you provide a beakdown such as line#'s on the settlement statement.