Mortgage interest tax question.?

Question

What does the "cost basis of my home" mean? How does that figure in with my income taxes? Thanx!

Answer 1

It is the cost of your home, plus any IMPROVEMENTS you might have made as you own it. Regular maintenance doesn't count.

This is important if you sell your home, and you are expecting more than 250K profit from it. Or if it was used for business or otherwise depreciated.

Answer 2

It doesn'taffect your taxes until you sell, if it's your home and not rental property.

Cost basis is what you bought it for, plus the cost of any improvements (NOT repairs) you put in after you owned it, plus real estate commissions when you sell it.  At time of sale, your cost basis is used to calculate your gain, which determines if you owe any tax on the sale.

Answer 3

It is the amount you paid for your home, less the cost of the land.

It only figures directly into income tax returns if you are taking depreciation on your home itself, due to renting out part or all of it, or having an office-in-home deduction.

What form are you trying to fill out?