Department of the Treasury

Internal Revenue Service

Publication 530

Cat. No. 15058K

Tax

Information for

Homeowners

For use in preparing

2023 Returns

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Contents

What’s New ............................... 1

Reminders ............................... 1

Introduction .............................. 2

What You Can and Can’t Deduct ............... 3

State and Local Real Estate Taxes ............ 4

Sales Taxes ............................ 5

Home Mortgage Interest ................... 6

Mortgage Interest Credit ................... 12

Figuring the Credit ...................... 12

Basis .................................. 14

Figuring Your Basis ...................... 14

Adjusted Basis ......................... 17

Keeping Records ......................... 17

How To Get Tax Help ....................... 20

Index .................................. 24

What’s New

Residential clean energy credit. The residential clean 

energy credit added a credit for qualified battery storage 

technology. Battery storage technology costs are allowed 

for the residential clean energy credit for expenses paid 

after December 31, 2022.

Biomass fuel property costs are no longer allowed for 

the residential clean energy credit for property placed in 

service after December 31, 2022. See the Instructions for 

Form 5695, Residential Energy Credits, for more information.

Energy efficient home improvement credit. The energy efficient home improvement credit is now divided into 

two sections to differentiate between qualified energy efficiency improvements and residential energy property expenditures. There is no lifetime limit on the amount of the 

credit. See the Instructions for Form 5695 for more information.

Reminders

Future developments. For the latest information about 

developments related to Pub. 530, such as legislation 

enacted after it was published, go to IRS.gov/Pub530.

Residential energy efficient property credit. The residential energy efficient property credit is now the residential clean energy credit. The credit rate for property placed 

in service in 2022 through 2032 is 30%.

Energy efficient home improvement credit. The nonbusiness energy property credit is now the energy efficient 

home improvement credit. The credit is extended to property placed in service after December 31, 2032.

Jan 25, 2024
Mortgage insurance premiums. The itemized deduction for mortgage premiums has expired. The deduction 

doesn’t exist for premiums paid after December 31, 2021.

Home Affordable Modification Program (HAMP). If 

you benefit from Pay-for-Performance Success Payments, 

the payments aren’t taxable under HAMP.

Repayment of first-time homebuyer credit. Generally, 

you must repay any credit you claimed for a home you 

bought if you bought the home in 2008. See Form 5405 

and its instructions for details and for exceptions to the repayment rule.

Home equity loan interest. No matter when the indebtedness was incurred, for tax years beginning in 2018 

through 2025, you cannot deduct the interest from a loan 

secured by your home to the extent the loan proceeds 

weren't used to buy, build, or substantially improve your 

home.

Homeowner Assistance Fund. The Homeowner Assistance Fund program (HAF) was established to provide financial assistance to eligible homeowners for purposes of 

paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services, and 

also displacements of homeowners experiencing financial 

hardship after January 21, 2020. If you are a homeowner 

who received assistance under the HAF, the payments 

from the HAF program are not considered income to you 

and you cannot take a deduction or credit for expenditures 

paid from the HAF program.

Rev. Proc. 2021-47 provides an optional method for 

certain homeowners who itemize their deductions to determine the amount you can deduct for home mortgage interest and state and local real property taxes if you paid 

the mortgage servicer with your own funds but also received financial assistance from the HAF program described in Rev. Proc. 2021-47. Please note, though Rev. Proc. 

2021-47 provides for the possible deduction of home 

mortgage insurance premiums, you cannot deduct any 

home mortgage insurance premiums you paid after December 31, 2021. For more details about the HAF program, see Homeowner Assistance Fund. You may use the 

optional method if you meet the following two requirements.

1. You paid a portion of the mortgage interest or state 

and local real property taxes from your own sources 

(that is, out-of-pocket payments not subsidized by any 

governmental financial assistance programs).

2. You meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on 

your main home.

The optional method allows you to deduct the mortgage interest and state and local real property taxes reported on Form 1098, Mortgage Interest Statement, but 

only up to the amount you paid from your own sources to 

the mortgage servicer during the tax year. You are not required to use this optional method to figure your deduction 

for mortgage interest and state and local real property 

taxes on your main home.

See State and Local Real Estate Taxes and Home 

Mortgage Interest, later, to determine whether you meet 

the rules to deduct all of the mortgage interest on your 

loan and all of the real estate taxes on your main home. 

For more details about the HAF program, see Homeowner 

Assistance Fund at Treasury.gov/haf. If you received HAF 

funds from an Indian Tribal Government or an Alaska Native Corporation and want more details about the HAF program, see frequently asked questions (FAQs) at IRS.gov/

ITGANCFAQs.

See State and Local Real Estate Taxes and Home 

Mortgage Interest, later, to determine whether you 

meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on your 

main home.

Extended tax benefit. Certain tax benefits, including the 

following, that were set to expire have been extended.

• The nonbusiness energy property credit has changed 

to the energy efficient home improvement credit. The 

credit is extended to property placed in service 

through December 31, 2032.

• The exclusion from income of discharges of qualified 

principal residence indebtedness has been extended 

through 2026.

Residential energy credits. You may be able to take a 

credit if you made energy saving improvements to your 

home located in the United States in 2023. See the Instructions for Form 5695, Residential Energy Credits, for 

more information.

Mortgage debt forgiveness. You can exclude from 

gross income any discharges of qualified principal residence indebtedness made after 2006 and in most cases 

before 2026. You must reduce the basis of your principal 

residence (but not below zero) by the amount you exclude. 

See Discharges of qualified principal residence indebtedness, later, and Form 982, Reduction of Tax Attributes 

Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), for more information.

Photographs of missing children. The IRS is a proud 

partner with the National Center for Missing & Exploited 

Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring 

these children home by looking at the photographs and 

calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

This publication provides tax information for homeowners. 

Your home may be a house, condominium, cooperative 

apartment, mobile home, houseboat, or house trailer that 

contains sleeping space and toilet and cooking facilities.

This publication explains how you treat items such as 

settlement and closing costs, real estate taxes, sales 

taxes, home mortgage interest, and repairs.

CAUTION

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2 Publication 530 (2023)
The following topics are explained.

• What you can and can’t deduct on your tax return.

• The tax credit you can claim if you received a mortgage credit certificate when you bought your home.

• Why you should keep track of adjustments to the basis 

of your home. (Your home's basis is generally what it 

cost; adjustments include the cost of any improvements you might make.)

• What records you should keep as proof of the basis 

and adjusted basis.

Comments and suggestions. We welcome your comments about this publication and suggestions for future 

editions.

You can send us comments through IRS.gov/

FormComments. Or, you can write to the Internal Revenue 

Service, Tax Forms and Publications, 1111 Constitution 

Ave. NW, IR-6526, Washington, DC 20224.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will 

consider your comments and suggestions as we revise 

our tax forms, instructions, and publications. Don’t send 

tax questions, tax returns, or payments to the above address.

Getting answers to your tax questions. If you have 

a tax question not answered by this publication or the How 

To Get Tax Help section at the end of this publication, go 

to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the search 

feature or viewing the categories listed.

Getting tax forms, instructions, and publications. 

Go to IRS.gov/Forms to download current and prior-year 

forms, instructions, and publications.

Ordering tax forms, instructions, and publications. 

Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order 

prior-year forms and instructions. The IRS will process 

your order for forms and publications as soon as possible. 

Don’t resubmit requests you’ve already sent us. You can 

get forms and publications faster online.

Useful Items

You may want to see:

Publication

4681 Canceled Debts, Foreclosures, 

Repossessions, and Abandonments

23 Selling Your Home

2 Taxable and Nontaxable Income

527 Residential Rental Property

547 Casualties, Disasters, and Thefts

551 Basis of Assets

555 Community Property

587 Business Use of Your Home

 4681

 523

 525

 527

 547

 551

 555

 587

Home Mortgage Interest Deduction

Form (and Instructions)

Itemized Deductions

Repayment of the First-Time Homebuyer 

Credit

Residential Energy Credits

Mortgage Interest Credit

Reduction of Tax Attributes Due to Discharge of 

Indebtedness (and Section 1082 Basis 

Adjustment)

See How To Get Tax Help, near the end of this publication, 

for information about getting publications and forms.

What You Can and Can’t 

Deduct

To deduct expenses of owning a home, you must file Form 

1040, U.S. Individual Income Tax Return, or Form 

1040-SR, U.S. Income Tax Return for Seniors, and itemize 

your deductions on Schedule A (Form 1040). If you itemize, you can’t take the standard deduction.

This section explains what expenses you can deduct as 

a homeowner. It also points out expenses that you can’t 

deduct. There are three primary discussions: state and local real estate taxes, sales taxes, and home mortgage interest.

Generally, your real estate taxes and home mortgage 

interest are included in your house payment.

Your house payment. If you took out a mortgage (loan) 

to finance the purchase of your home, you probably have 

to make monthly house payments. Your house payment 

may include several costs of owning a home. The only 

costs you can deduct are state and local real estate taxes 

actually paid to the taxing authority and interest that qualifies as home mortgage interest.These are discussed in 

more detail later.

Some nondeductible expenses that may be included in 

your house payment include:

• Fire or homeowner's insurance premiums,

• Mortgage insurance premiums, and

• The amount applied to reduce the principal of the 

mortgage.

Minister's or military housing allowance. If you are a 

minister or a member of the uniformed services and receive a housing allowance that isn’t taxable, you can still 

deduct your real estate taxes and your home mortgage interest. You don’t have to reduce your deductions by your 

nontaxable allowance. For more information, see Pub. 

517, Social Security and Other Information for Members of 

the Clergy and Religious Workers, and Pub. 3, Armed 

Forces' Tax Guide.

 936

 Schedule A (Form 1040)

 5405

 5695

 8396

 982

Publication 530 (2023) 3
Nondeductible payments. You can’t deduct any of the 

following items.

• Insurance, including fire and comprehensive coverage, and title insurance.

• Wages you pay for domestic help.

• Depreciation.

• The cost of utilities, such as gas, electricity, or water.

• Most settlement costs. See Settlement or closing 

costs under Cost as Basis, later, for more information.

• Forfeited deposits, down payments, or earnest money.

• Internet or wifi system or service.

• Homeowners association fees, condominium association fees, or common charges.

• Repairs to home.

State and Local Real Estate Taxes

Most state and local governments charge an annual tax 

on the value of real property. This is called a real estate 

tax. You can deduct the tax if it is assessed uniformly at a 

like rate on all real property throughout the community. 

The proceeds must be for general community or governmental purposes and not be a payment for a special privilege granted or special service rendered to you.

The deduction for state and local taxes, including 

real estate taxes, is limited to $10,000 ($5,000 if 

married filing separately). See the Instructions for 

Schedule A (Form 1040) for more information.

Deductible Real Estate Taxes

You can deduct real estate taxes imposed on you. You 

must have paid them either at settlement or closing, or to 

a taxing authority (either directly or through an escrow account) during the year. If you own a cooperative apartment, see Special Rules for Cooperatives, later.

Where to deduct real estate taxes. Enter the amount of 

your deductible state and local real estate taxes on 

Schedule A (Form 1040), line 5b.

Real estate taxes paid at settlement or closing. Real 

estate taxes are generally divided so that you and the 

seller each pay taxes for the part of the property tax year 

you owned the home. Your share of these taxes is deductible if you itemize your deductions.

Division of real estate taxes. For federal income tax 

purposes, the seller is treated as paying the property 

taxes up to, but not including, the date of sale. You (the 

buyer) are treated as paying the taxes beginning with the 

date of sale. This applies regardless of the lien dates under local law. Generally, this information is included on the 

settlement statement you get at closing.

You and the seller each are considered to have paid 

your own share of the taxes, even if one or the other paid 

the entire amount. You each can deduct your own share, if 

you itemize deductions, for the year the property is sold.

CAUTION

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Example. You bought your home on September 1. The 

property tax year (the period to which the tax relates) in 

your area is the calendar year. The tax for the year was 

$730 and was due and paid by the seller on August 15.

You owned your new home during the property tax year 

for 122 days (September 1 to December 31, including 

your date of purchase). You figure your deduction for real 

estate taxes on your home as follows.

1. Enter the total real estate taxes for the real property 

tax year ........................... $730

2. Enter the number of days in the property tax year that 

you owned the property .................. 122

3. Divide line 2 by 365 .................... 0.3342

4. Multiply line 1 by line 3. This is your deduction. Enter 

it on Schedule A (Form 1040), line 5b .......... $244

You can deduct $244 on your return for the year if you 

itemize your deductions. You are considered to have paid 

this amount and can deduct it on your return even if, under 

the contract, you didn’t have to reimburse the seller.

Delinquent taxes. Delinquent taxes are unpaid taxes 

that were imposed on the seller for an earlier tax year. If 

you agree to pay delinquent taxes when you buy your 

home, you can’t deduct them. You treat them as part of the 

cost of your home. See Real estate taxes, later, under Basis.

Escrow accounts. Many monthly house payments include an amount placed in escrow (put in the care of a 

third party) for real estate taxes. You may not be able to 

deduct the total you pay into the escrow account. You can 

deduct only the real estate taxes that the lender actually 

paid from escrow to the taxing authority. Your real estate 

tax bill will show this amount.

Refund or rebate of real estate taxes. If you receive a 

refund or rebate of real estate taxes this year for amounts 

you paid this year, you must reduce your real estate tax 

deduction by the amount refunded to you. If the refund or 

rebate was for real estate taxes paid for a prior year, you 

may have to include some or all of the refund in your income. For more information, see Recoveries in Pub. 525.

Items You Can’t Deduct as Real Estate Taxes

The following items aren’t deductible as real estate taxes.

Charges for services. An itemized charge for services 

to specific property or people isn’t a tax, even if the charge 

is paid to the taxing authority. You can’t deduct the charge 

as a real estate tax if it is:

• A unit fee for the delivery of a service (such as a $5 

fee charged for every 1,000 gallons of water you use),

• A periodic charge for a residential service (such as a 

$20 per month or $240 annual fee charged to each 

homeowner for trash collection), or

• A flat fee charged for a single service provided by your 

local government (such as a $30 charge for mowing 

your lawn because it had grown higher than permitted 

under a local ordinance).

4 Publication 530 (2023)
You must look at your real estate tax bill to decide 

if any nondeductible itemized charges, such as 

those listed above, are included in the bill. If your 

taxing authority (or lender) doesn’t furnish you a copy of 

your real estate tax bill, ask for it. Contact the taxing authority if you need additional information about a specific 

charge on your real estate tax bill.

Assessments for local benefits. You can’t deduct 

amounts you pay for local benefits that tend to increase 

the value of your property. Local benefits include the construction of streets, sidewalks, or water and sewer systems. You must add these amounts to the basis of your 

property.

You can, however, deduct assessments (or taxes) for 

local benefits if they are for maintenance, repair, or interest charges related to those benefits. An example is a 

charge to repair an existing sidewalk and any interest included in that charge.

If only a part of the assessment is for maintenance, repair, or interest charges, you must be able to show the 

amount of that part to claim the deduction. If you can’t 

show what part of the assessment is for maintenance, repair, or interest charges, you can’t deduct any of it.

An assessment for a local benefit may be listed as an 

item in your real estate tax bill. If so, use the rules in this 

section to find how much of it, if any, you can deduct.

Transfer taxes (or stamp taxes). You can't deduct 

transfer taxes and similar taxes and charges on the sale of 

a personal home. If you are the buyer and you pay them, 

include them in the cost basis of the property. If you are 

the seller and you pay them, they are expenses of the sale 

and reduce the amount realized on the sale.

Homeowners’ association assessments. You can't deduct these assessments because the homeowners’ association, rather than a state or local government, imposes 

them.

Foreign taxes you paid on real estate. You can't deduct foreign taxes you paid on real estate.

Special Rules for Cooperatives

If you own a cooperative apartment, some special rules 

apply to you, though you generally receive the same tax 

treatment as other homeowners. As an owner of a cooperative apartment, you own shares of stock in a corporation 

that owns or leases housing facilities. You can deduct your 

share of the corporation's deductible real estate taxes if 

the cooperative housing corporation meets the following 

conditions.

1. The corporation has only one class of stock outstanding.

2. Each stockholder, solely because of ownership of the 

stock, can live in a house, apartment, or house trailer 

owned or leased by the corporation.

CAUTION

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3. No stockholder can receive any distribution out of 

capital, except on a partial or complete liquidation of 

the corporation.

4. At least one of the following.

a. At least 80% of the corporation's gross income for 

the tax year was paid by the tenant-stockholders. 

For this purpose, gross income means all income 

received during the entire tax year, including any 

received before the corporation changed to cooperative ownership.

b. At least 80% of the total square footage of the corporation's property must be available for use by 

the tenant-stockholders during the entire tax year.

c. At least 90% or more of the expenditures paid or 

incurred by the corporation were used for the acquisition, construction, management, maintenance, or care of the corporation’s property for the 

benefit of the tenant-shareholders during the entire tax year.

Tenant-stockholders. A tenant-stockholder can be any 

entity (such as a company or corporation, trust, estate, 

partnership, or association) as well as an individual. The 

tenant-stockholder doesn't have to live in any of the cooperative's dwelling units. The units that the tenant-stockholder has the right to occupy can be rented to others.

Deductible taxes. You figure your share of real estate 

taxes in the following way.

1. Divide the number of your shares of stock by the total 

number of shares outstanding, including any shares 

held by the corporation.

2. Multiply the corporation's deductible real estate taxes 

by the number you figured in (1). This is your share of 

the real estate taxes.

Generally, the corporation will tell you your share of its 

real estate tax. This is the amount you can deduct if it reasonably reflects the cost of real estate taxes for your 

dwelling unit.

Refund of real estate taxes. If the corporation receives a refund of real estate taxes it paid in an earlier 

year, it must reduce the amount of real estate taxes paid 

this year when it allocates the tax expense to you. Your 

deduction for real estate taxes the corporation paid this 

year is reduced by your share of the refund the corporation received. 

Sales Taxes

Generally, you can elect to deduct state and local general 

sales taxes instead of state and local income taxes as an 

itemized deduction on Schedule A (Form 1040). You must 

check the box on Schedule A (Form 1040), line 5a, if you 

elect this option. Deductible sales taxes may include sales 

taxes paid on your home (including mobile and prefabricated), or home building materials if the tax rate was the 

same as the general sales tax rate. For information on 

Publication 530 (2023) 5
figuring your deduction, see the Instructions for Schedule A (Form 1040).

The deduction for state and local taxes, including 

general sales taxes, if elected instead of income 

taxes, is limited to $10,000 ($5,000 if married filing separately). See the Instructions for Schedule A (Form 

1040) for more information.

If you elect to deduct the sales taxes paid on your 

home, or home building materials, you can't include them as part of your cost basis in the home.

Home Mortgage Interest

This section of the publication gives you basic information 

about home mortgage interest, including information on 

interest paid at settlement, points, and Form 1098.

Most home buyers take out a mortgage (loan) to buy 

their home. They then make monthly payments to either 

the mortgage holder or someone collecting the payments 

for the mortgage holder.

Usually, you can deduct the entire part of your payment 

that is for mortgage interest for acquisition debt (or debt 

that qualifies as acquisition debt) if you itemize your deductions on Schedule A (Form 1040). See

Home Acquisition Debt for more information.

Limits on home mortgage interest. Your deduction for 

home mortgage interest is subject to a number of limits. If 

one or more of the following limits apply, see Pub. 936 to 

figure your deduction. Also see Pub. 936 if you later refinance your mortgage or buy a second home.

Limit for loan proceeds not used to buy, build, or 

substantially improve your home. You can only deduct home mortgage interest to the extent that the loan 

proceeds from your home mortgage are used to buy, 

build, or substantially improve the home securing the loan. 

The only exception to this limit is for loans taken out on or 

before October 13, 1987; the loan proceeds for these 

loans are treated as having been used to buy, build, or 

substantially improve the home. See Pub. 936 for more information about loans taken out on or before October 13, 

1987.

Limit on loans taken out on or before December 

15, 2017. For qualifying debt taken out on or before December 15, 2017, you can only deduct home mortgage interest on up to $1 million ($500,000 if you are married filing separately) of that debt. The only exception is for loans 

taken out on or before October 13, 1987; see Pub. 936 for 

more information about loans taken out on or before October 13, 1987.

See Pub. 936 to figure your deduction if you have loans 

taken out on or before December 15, 2017, that exceed $1 

million ($500,000 if you are married filing separately).

Limit on loans taken out after December 15, 2017. 

For qualifying debt taken out after December 15, 2017, 

you can only deduct home mortgage interest on up to 

$750,000 ($375,000 if you are married filing separately) of 

CAUTION

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CAUTION

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that debt. If you also have qualifying debt subject to the $1 

million ($500,000 if you are married filing separately) limitation discussed under Limit on loans taken out on or before December 15, 2017, earlier, the $750,000 limit for 

debt taken out after December 15, 2017, is reduced by the 

amount of your qualifying debt subject to the $1 million 

limit. An exception exists for certain loans taken out after 

December 15, 2017, but before April 1, 2018. If the exception applies, your loan may be treated in the same manner 

as a loan taken out on or before December 15, 2017. See 

Pub. 936 for more information about this exception.

See Pub. 936 to figure your deduction if you have loans 

taken out after October 13, 1987, that exceed $750,000 

($375,000 or less if you are married filing separately).

Limit when loans exceed the fair market value of 

the home. If the total amount of all mortgages is more 

than the fair market value of the home, see Pub. 936 to figure your deduction.

Refund of home mortgage interest. If you receive a refund of home mortgage interest that you deducted in an 

earlier year and that reduced your tax, you must generally 

include the refund in income in the year you receive it. For 

more information, see Recoveries in Pub. 525. The 

amount of the refund will usually be shown on the mortgage interest statement you receive from your mortgage 

lender. See Mortgage Interest Statement, later.

Deductible Mortgage Interest

To be deductible, the interest you pay must be on a loan 

secured by your main home or a second home, regardless 

of how the loan is labeled. The loan can be a first or second mortgage, a home improvement loan, a home equity 

loan, or a refinanced mortgage.

Interest paid on home mortgage proceeds is only 

deductible to the extent the loan proceeds were 

used to buy, build, or substantially improve your 

home.

Prepaid interest. If you pay interest in advance for a period that goes beyond the end of the tax year, you must 

spread this interest over the tax years to which it applies. 

Generally, you can deduct in each year only the interest 

that qualifies as home mortgage interest for that year. An 

exception (discussed later) applies to points.

Late payment charge on mortgage payment. You can 

deduct as home mortgage interest a late payment charge 

if it wasn't for a specific service in connection with your 

mortgage loan.

Mortgage prepayment penalty. If you pay off your home 

mortgage early, you may have to pay a penalty. You can 

deduct that penalty as home mortgage interest, provided 

the penalty isn't for a specific service performed or cost incurred in connection with your mortgage loan.

Ground rent. In some states (such as Maryland), you 

may buy your home subject to a ground rent. A ground 

rent is an obligation you assume to pay a fixed amount per 

CAUTION

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6 Publication 530 (2023)
year on the property. Under this arrangement, you are 

leasing (rather than buying) the land on which your home 

is located.

Redeemable ground rents. If you make annual or periodic rental payments on a redeemable ground rent, you 

can deduct the payments as mortgage interest. The 

ground rent is a redeemable ground rent only if all of the 

following are true.

• Your lease, including renewal periods, is for more than 

15 years.

• You can freely assign the lease.

• You have a present or future right (under state or local 

law) to end the lease and buy the lessor's entire interest in the land by paying a specified amount.

• The lessor's interest in the land is primarily a security 

interest to protect the rental payments to which the 

lessor is entitled.

Payments made to end the lease and buy the lessor's 

entire interest in the land aren't redeemable ground rents. 

You can't deduct them.

Nonredeemable ground rents. Payments on a nonredeemable ground rent aren't mortgage interest. You can 

deduct them as rent only if they are a business expense or 

if they are for rental property.

Cooperative apartment. You can usually treat the interest on a loan you took out to buy stock in a cooperative 

housing corporation as home mortgage interest if you own 

a cooperative apartment, and the cooperative housing 

corporation meets the conditions described earlier under 

Special Rules for Cooperatives. In addition, you can treat 

as home mortgage interest your share of the corporation's 

deductible mortgage interest. Figure your share of mortgage interest the same way that is shown for figuring your 

share of real estate taxes in the Example under Division of 

real estate taxes, earlier. For more information on cooperatives, see Special Rule for Tenant-Stockholders in Cooperative Housing Corporations in Pub. 936.

Refund of cooperative's mortgage interest. You 

must reduce your mortgage interest deduction by your 

share of any cash portion of a patronage dividend that the 

cooperative receives. The patronage dividend is a partial 

refund to the cooperative housing corporation of mortgage 

interest it paid in a prior year.

If you receive a Form 1098 from the cooperative housing corporation, the form should show only the amount 

you can deduct.

SBA disaster home loans. Interest paid on disaster 

home loans from the Small Business Administration (SBA) 

is deductible as mortgage interest if the requirements discussed earlier under Home Mortgage Interest are met.

Mortgage Interest Paid at Settlement

One item that normally appears on a settlement or closing 

statement is home mortgage interest.

You can deduct the interest that you pay at settlement if 

you itemize your deductions on Schedule A (Form 1040). 

This amount should be included in the mortgage interest 

statement provided by your lender. See the discussion under Mortgage Interest Statement, later. Also, if you pay interest in advance, see Prepaid interest, earlier, and Points 

next.

Points

The term “points” is used to describe certain charges paid, 

or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, 

maximum loan charges, loan discount, or discount points.

A borrower is treated as paying any points that a home 

seller pays for the borrower's mortgage. See Points paid 

by the seller, later.

General rule. You can't deduct the full amount of points 

in the year paid. They are prepaid interest, so you must 

generally deduct them over the life (term) of the mortgage.

Exception. You can deduct the full amount of points in 

the year paid if you meet all the following tests.

1. Your loan is secured by your main home. (Generally, 

your main home is the one you live in most of the 

time.)

2. Paying points is an established business practice in 

the area where the loan was made.

3. The points paid weren't more than the points generally charged in that area.

4. You use the cash method of accounting. This means 

you report income in the year you receive it and deduct expenses in the year you pay them. Most individuals use this method.

5. The points weren't paid in place of amounts that are 

ordinarily stated separately on the settlement statement, such as appraisal fees, inspection fees, title 

fees, attorney fees, and property taxes.

6. The funds you provided at or before closing, plus any 

points the seller paid, were at least as much as the 

points charged. The funds you provided aren't required to have been applied to the points. They can 

include a down payment, an escrow deposit, earnest 

money, and other funds you paid at or before closing 

for any purpose. You can't have borrowed these 

funds.

7. You use your loan to buy or build your main home.

8. The points were figured as a percentage of the principal amount of the mortgage.

9. The amount is clearly shown on the settlement statement (such as the Uniform Settlement Statement, 

Form HUD-1) as points charged for the mortgage. 

The points may be shown as paid from either your 

funds or the seller's.

Publication 530 (2023) 7
Note. If you meet all of the tests listed above and you 

itemize your deductions in the year you get the loan, you 

can either deduct the full amount of points in the year paid 

or deduct them over the life of the loan, beginning in the 

year you get the loan. If you do not itemize your deductions in the year you get the loan, you can spread the 

points over the life of the loan and deduct the appropriate 

amount in each future year, if any, when you do itemize 

your deductions.

Home improvement loan. You can also fully deduct 

in the year paid points paid on a loan to substantially improve your main home if you meet the first six tests listed 

earlier.

Refinanced loan. If you use part of the refinanced 

mortgage proceeds to substantially improve your main 

home and you meet the first six tests listed earlier, you can 

fully deduct the part of the points related to the improvement in the year you paid them with your own funds. You 

can deduct the rest of the points over the life of the loan.

Points not fully deductible in year paid. If you don’t 

qualify under the exception to deduct the full amount of 

points in the year paid (or choose not to do so), see Points 

in Pub. 936 for the rules on when and how much you can 

deduct.

Figure A. You can use Figure A as a quick guide to 

see whether your points are fully deductible in the year 

paid.

8 Publication 530 (2023)
Figure A. Are My Points Fully Deductible This Year?

Start Here:

Is the loan secured by your main home?

No

Yes

No

Yes

Yes

No

Do you use the cash method of accounting?

No

Yes

Yes

No

No

Yes

Yes

Did you take out the loan to substantially improve your main home?

No

Did you take out the loan to buy or build your main home? 

No

Yes

No

Yes

No

Yes

You can fully deduct the points this year on Schedule A (Form 1040).

Is the payment of points an established business practice in your 

area?

Were the points paid more than the amount generally charged in 

your area?

Were the points paid in place of amounts that ordinarily are 

separately stated on the settlement sheet?

Were the funds you provided (other than those you borrowed from 

your lender or mortgage broker), plus any points the seller paid, at 

least as much as the points charged?* 

Were the points computed as a percentage of the principal amount 

of the mortgage?

Is the amount paid clearly shown as points on the settlement 

statement? 

You cannot fully deduct the points this year. 

See the discussion on Points, earlier.

* The funds you provided are not required to have been applied to the points. They can include a down payment, an escrow deposit, earnest money, and other funds 

you paid at or before closing for any purpose.

Publication 530 (2023) 9
Amounts charged for services. Amounts charged by 

the lender for specific services connected to the loan 

aren't interest. Examples of these charges are:

• Appraisal fees,

• Notary fees,

• Preparation costs for the mortgage note or deed of 

trust, and

• Mortgage insurance premiums.

You can't deduct these amounts as points either in the 

year paid or over the life of the mortgage. For information 

about the tax treatment of these amounts and other settlement fees and closing costs, see Basis, later.

Points paid by the seller. The term “points” includes 

loan placement fees that the seller pays to the lender to 

arrange financing for the buyer.

Treatment by seller. The seller can't deduct these 

fees as interest. However, they are a selling expense that 

reduces the seller's amount realized. See Pub. 523 for 

more information.

Treatment by buyer. The buyer treats seller-paid 

points as if the buyer had paid them. If all the tests listed 

earlier under Exception are met, the buyer can deduct the 

points in the year paid. If any of those tests aren't met, the 

buyer must deduct the points over the life of the loan.

The buyer must also reduce the basis of the home by 

the amount of the seller-paid points. For more information 

about the basis of your home, see Basis, later.

Funds provided are less than points. If you meet all 

the tests listed earlier under Exception except that the 

funds you provided were less than the points charged to 

you (test 6), you can deduct the points in the year paid up 

to the amount of funds you provided. In addition, you can 

deduct any points paid by the seller.

Example 1. When you took out a $100,000 mortgage 

loan to buy your home in December, you were charged 

one point ($1,000). You meet all the tests for deducting 

points in the year paid (see Exception, earlier), except the 

only funds you provided were a $750 down payment. Of 

the $1,000 you were charged for points, you can deduct 

$750 in the year paid. You spread the remaining $250 over 

the life of the mortgage.

Example 2. The facts are the same as in Example 1, 

except that the person who sold you your home also paid 

one point ($1,000) to help you get your mortgage. In the 

year paid, you can deduct $1,750 ($750 of the amount you 

were charged plus the $1,000 paid by the seller). You 

spread the remaining $250 over the life of the mortgage. 

You must reduce the basis of your home by the $1,000 

paid by the seller.

Excess points. If you meet all the tests under Exception, 

earlier, except that the points paid were more than are 

generally charged in your area (test 3), you can deduct in 

the year paid only the points that are generally charged. 

You must spread any additional points over the life of the 

mortgage.

Mortgage ending early. If you spread your deduction for 

points over the life of the mortgage, you can deduct any 

remaining balance in the year the mortgage ends. A mortgage may end early due to a prepayment, refinancing, 

foreclosure, or similar event.

Example. Dan paid $3,000 in points in 2015 that he 

had to spread out over the 15-year life of the mortgage. 

He had deducted $1,600 of these points through 2022.

Dan prepaid his mortgage in full in 2023. He can deduct the remaining $1,400 of points in 2023.

Exception. If you refinance the mortgage with the 

same lender, you can't deduct any remaining points for the 

year. Instead, deduct them over the term of the new loan.

Form 1098. The mortgage interest statement you receive 

should show not only the total interest paid during the 

year, but also your deductible points paid during the year. 

See Mortgage Interest Statement, later.

Where To Deduct Home Mortgage Interest

Enter on Schedule A (Form 1040), line 8a, the home mortgage interest and points reported to you on Form 1098 

(discussed next). If you didn't receive a Form 1098, enter 

your deductible interest on line 8b, and any deductible 

points on line 8c. See Table 1 for a summary of where to 

deduct home mortgage interest and state and local real 

estate taxes.

If you paid home mortgage interest to the person from 

whom you bought your home, show that person's name, 

address, and social security number (SSN) or employer 

identification number (EIN) on the dotted lines next to 

line 8b. The seller must give you this number and you 

must give the seller your SSN. Form W-9, Request for 

Taxpayer Identification Number and Certification, can be 

used for this purpose. Failure to meet either of these requirements may result in a $50 penalty for each failure.

10 Publication 530 (2023)
Mortgage Interest Statement

If you paid $600 or more of mortgage interest (including 

certain points during the year) on any one mortgage to a 

mortgage holder in the course of that holder's trade or 

business, you should receive a Form 1098 or similar statement from the mortgage holder. The statement will show 

the total interest paid on your mortgage during the year. If 

you bought a main home during the year, it will also show 

the deductible points you paid and any points you can deduct that were paid by the person who sold you your 

home. See Points, earlier.

The interest you paid at settlement should be included 

on the statement. If it isn't, add the interest from the settlement sheet that qualifies as home mortgage interest to the 

total shown on Form 1098 or similar statement. Put the total on Schedule A (Form 1040), line 8a, and attach a statement to your return explaining the difference. Enter “See 

attached” to the right of line 8a.

A mortgage holder can be a financial institution, a governmental unit, or a cooperative housing corporation. If a 

statement comes from a cooperative housing corporation, 

it will generally show your share of interest.

Your mortgage interest statement for 2023 should be 

provided or sent to you by January 31, 2024. If it is mailed, 

you should allow adequate time to receive it before contacting the mortgage holder. A copy of this form will also 

be sent to the IRS.

Example. You bought a new home on May 3. You paid 

no points on the purchase. During the year, you made 

mortgage payments that included $4,480 deductible interest on your new home. The settlement sheet for the purchase of the home included interest of $620 for 29 days in 

May. The mortgage statement you receive from the lender 

includes total interest of $5,100 ($4,480 + $620). You can 

deduct the $5,100 if you itemize your deductions.

Refund of overpaid interest. If you receive a refund of 

mortgage interest you overpaid in a prior year, you will 

generally receive a Form 1098 showing the refund in 

box 4. Generally, you must include the refund in income in 

the year you receive it. See Refund of home mortgage interest, earlier, under Home Mortgage Interest.

More than one borrower. If you and at least one other 

person (other than your spouse if you file a joint return) 

were liable for and paid interest on a mortgage that was 

for your home, and the other person received a Form 1098 

showing the interest that was paid during the year, attach 

a statement to your paper return explaining this. Show 

how much of the interest each of you paid, and give the 

name and address of the person who received the form. 

Deduct your share of the interest on Schedule A (Form 

1040), line 8b, and enter “See attached” to the right of that 

line.

Home Acquisition Debt

Home acquisition debt is a mortgage you took out after 

October 13, 1987, to buy, build, or substantially improve a 

qualified home. It must also be secured by that home.

If the amount of your mortgage is more than the cost of 

the home plus the cost of any substantial improvements, 

only the debt that is not more than the cost of the home 

plus improvements qualifies as home acquisition debt.

Home acquisition debt limit. The total amount you can 

treat as home acquisition debt at any time on your home 

cannot be more than $1 million ($500,000 if married filing 

separately). However, for tax years beginning after December 31, 2017, and before January 1, 2026, there is a 

further limitation. If you purchased your home during this 

time, the total amount you can treat as home acquisition 

debt at any time on your home generally cannot be more 

than $750,000 ($375,000 if married filing separately).

Discharges of qualified principal residence indebtedness. You can exclude from gross income any discharges 

of qualified principal residence indebtedness made after 

2006 and in most cases before 2026. You must reduce the 

basis of your principal residence (but not below zero) by 

the amount you exclude.

Principal residence. Your principal residence is the 

home where you ordinarily live most of the time. You can 

have only one principal residence at any one time.

Qualified principal residence indebtedness. This 

indebtedness is a mortgage that you took out to buy, build, 

or substantially improve your principal residence and that 

is secured by that residence. If the amount of your original 

mortgage is more than the cost of your principal residence 

Where To Deduct Interest and Taxes Paid on Your Home

See the text for information on what expenses are eligible.

IF you are eligible to deduct . . . THEN report the amount 

on Schedule A (Form 1040) . . .

state and local real estate taxes line 5b.

home mortgage interest and points reported on Form 1098 line 8a.

home mortgage interest not reported on Form 1098 line 8b.

points not reported on Form 1098 line 8c.

Table 1.

Publication 530 (2023) 11
plus the cost of substantial improvements, qualified principal residence indebtedness can’t be more than the cost of 

your principal residence plus improvements.

Any debt secured by your principal residence that you 

use to refinance qualified principal residence indebtedness is qualified principal residence indebtedness up to 

the amount of your old mortgage principal just before the 

refinancing. Additional debt incurred to substantially improve your principal residence is also qualified principal 

residence indebtedness.

Amount you can exclude. You can only exclude debt 

discharged after 2006 and in most cases before 2026. 

The most you can exclude is $750,000 ($375,000 if married filing separately). You can’t exclude any amount that 

was discharged because of services performed for the 

lender or on account of any other factor not directly related 

either to a decline in the value of your residence or to your 

financial condition.

Ordering rule. If only a part of a loan is qualified principal residence indebtedness, you can exclude only the 

amount of the discharge that is more than the amount of 

the loan (immediately before the discharge) that is not 

qualified principal residence indebtedness.

Qualified Home

This means your main home or your second home. A 

home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has 

sleeping, cooking, and toilet facilities.

Main home. You can have only one main home at any 

one time. This is the home where you ordinarily live most 

of the time.

Second home and other special situations. If you 

have a second home, use part of your home for other than 

residential living (such as a home office), rent out part of 

your home, or are having your home constructed, see 

Qualified Home in Pub. 936.

Mortgage Interest Credit

The mortgage interest credit is intended to help lower-income individuals afford home ownership. If you qualify, 

you can claim the credit on Form 8396 each year for part 

of the home mortgage interest you pay.

Who qualifies. You may be eligible for the credit if you 

were issued a qualified Mortgage Credit Certificate (MCC) 

from your state or local government. Generally, an MCC is 

issued only in connection with a new mortgage for the purchase of your main home.

The MCC will show the certificate credit rate you will 

use to figure your credit. It will also show the certified indebtedness amount. Only the interest on that amount 

qualifies for the credit. See Figuring the Credit, later.

You must contact the appropriate government 

agency about getting an MCC before you get a 

mortgage and buy your home. Contact your state 

or local housing finance agency for information about the 

availability of MCCs in your area.

How to claim the credit. To claim the credit, complete 

Form 8396 and attach it to your Form 1040, 1040-SR, or 

1040-NR. Include the credit in your total for Schedule 3 

(Form 1040), line 6g.

Reducing your home mortgage interest deduction. If 

you itemize your deductions on Schedule A (Form 1040), 

you must reduce your home mortgage interest deduction 

by the amount of the mortgage interest credit shown on 

Form 8396, line 3. You must do this even if part of that 

amount is to be carried forward to 2023.

Selling your home. If you purchase a home after 1990 

using an MCC, and you sell that home within 9 years, you 

may have to recapture (repay) all or part of the benefit you 

received from the MCC program. For additional information, see Paying Back Credits and Subsidies in Pub. 523.

Figuring the Credit

Figure your credit on Form 8396.

Mortgage not more than certified indebtedness. If 

your mortgage loan amount is equal to (or smaller than) 

the certified indebtedness amount shown on your MCC, 

enter on Form 8396, line 1, all the interest you paid on 

your mortgage during the year.

Mortgage more than certified indebtedness. If your 

mortgage loan amount is larger than the certified indebtedness amount shown on your MCC, you can figure the 

credit on only part of the interest you paid. To find the 

amount to enter on line 1, multiply the total interest you 

paid during the year on your mortgage by the following 

fraction.

Mortgage Larger than Certified 

Indebtedness

Certified indebtedness amount on your MCC

Original amount of your mortgage

The fraction won’t change as long as you are entitled to 

take the mortgage interest credit.

Example. Emily bought a home this year. Her mortgage loan is $125,000. The certified indebtedness 

amount on her MCC is $100,000. She paid $7,500 interest this year. Emily figures the interest to enter on Form 

8396, line 1, as follows:

 $100,000 

= 80% (0.80) $125,000

$7,500 x 0.80 = $6,000

TIP

12 Publication 530 (2023)
Emily enters $6,000 on Form 8396, line 1. In each later 

year, she will figure her credit using only 80% of the interest she pays for that year.

Limits

Two limits may apply to your credit.

• A limit based on the credit rate.

• A limit based on your tax.

Limit based on credit rate. If the certificate credit rate is 

higher than 20%, the credit you are allowed can't be more 

than $2,000.

Limit based on tax. After applying the limit based on the 

credit rate, your credit generally can't be more than your 

tax liability. See the Credit Limit Worksheet in the Form 

8396 instructions to figure the limit based on tax.

Dividing the Credit

If two or more persons (other than a married couple filing a 

joint return) hold an interest in the home to which the MCC 

relates, the credit must be divided based on the interest 

held by each person.

Example. John and his brother, George, were issued 

an MCC. They used it to get a mortgage on their main 

home. John has a 60% ownership interest in the home, 

and George has a 40% ownership interest in the home. 

John paid $5,400 mortgage interest this year and George 

paid $3,600.

The MCC shows a credit rate of 25% and a certified indebtedness amount of $130,000. The loan amount (mortgage) on their home is $120,000. The credit is limited to 

$2,000 because the credit rate is more than 20%.

John figures the credit by multiplying the mortgage interest he paid this year ($5,400) by the certificate credit 

rate (25%) for a total of $1,350. His credit is limited to 

$1,200 ($2,000 × 60% (0.60)).

George figures the credit by multiplying the mortgage 

interest he paid this year ($3,600) by the certificate credit 

rate (25%) for a total of $900. His credit is limited to $800 

($2,000 × 40% (0.40)).

Carryforward

If your allowable credit is reduced because of the limit 

based on your tax, you can carry forward the unused portion of the credit to the next 3 years or until used, whichever comes first.

Example. You receive a mortgage credit certificate 

from State X. This year, your regular tax liability is $1,100, 

you owe no alternative minimum tax, and your mortgage 

interest credit is $1,700. You claim no other credits. Your 

unused mortgage interest credit for this year is $600 

($1,700 − $1,100). You can carry forward this amount to 

the next 3 years or until used, whichever comes first.

Credit rate more than 20%. If you are subject to the 

$2,000 limit because your certificate credit rate is more 

than 20%, you can't carry forward any amount more than 

$2,000 (or your share of the $2,000 if you must divide the 

credit).

Example. In the earlier example under Dividing the 

Credit, John and George used the entire $2,000 credit. 

The excess

John $1,350 − $1,200 = $150

George $900 − $800 = $100

$150 for John ($1,350 − $1,200) and $100 for George 

($900 − $800) can't be carried forward to future years, despite the respective tax liabilities for John and George.

Refinancing

If you refinance your original mortgage loan on which you 

had been given an MCC, you must get a new MCC to be 

able to claim the credit on the new loan. The amount of 

credit you can claim on the new loan may change. Table 2 

summarizes how to figure your credit if you refinance your 

original mortgage loan.

An issuer may reissue an MCC after you refinance your 

mortgage. If you didn't get a new MCC, you may want to 

contact the state or local housing finance agency that issued your original MCC for information about whether you 

can get a reissued MCC.

Table 2. Effect of Refinancing on Your Credit Keep for Your Records

IF you get a new (reissued) MCC and the amount of your new 

mortgage is...

THEN the interest you claim on Form 8396, line 1, is...*

smaller than or equal to the certified indebtedness amount on the new 

MCC

all the interest paid during the year on your new mortgage.

larger than the certified indebtedness amount on the new MCC interest paid during the year on your new mortgage multiplied by the 

following fraction.

Certified indebtedness 

amount on your new MCC

Original amount of your 

mortgage

* The credit using the new MCC can't be more than the credit using the old MCC. See New MCC can't increase your credit, later.

Publication 530 (2023) 13
Year of refinancing. In the year of refinancing, add the 

applicable amount of interest paid on the old mortgage 

and the applicable amount of interest paid on the new 

mortgage, and enter the total on Form 8396, line 1.

If your new MCC has a credit rate different from the rate 

on the old MCC, you must attach a statement to Form 

8396. The statement must show the calculation for lines 1, 

2, and 3 for the part of the year when the old MCC was in 

effect. It must show a separate calculation for the part of 

the year when the new MCC was in effect. Combine the 

amounts from both calculations for line 3, enter the total 

on line 3 of the form, and enter “See attached” on the dotted line next to line 2.

New MCC can't increase your credit. The credit that 

you claim with your new MCC can't be more than the 

credit that you could have claimed with your old MCC.

In most cases, the agency that issues your new MCC 

will make sure that it doesn't increase your credit. However, if either your old loan or your new loan has a variable 

(adjustable) interest rate, you will need to check this yourself. In that case, you will need to know the amount of the 

credit you could have claimed using the old MCC.

There are two methods for figuring the credit you could 

have claimed. Under one method, you figure the actual 

credit that would have been allowed. This means you use 

the credit rate on the old MCC and the interest you would 

have paid on the old loan.

If your old loan was a variable rate mortgage, you can 

use another method to determine the credit that you could 

have claimed. Under this method, you figure the credit using a payment schedule of a hypothetical self-amortizing 

mortgage with level payments projected to the final maturity date of the old mortgage. The interest rate of the hypothetical mortgage is the annual percentage rate (APR) of 

the new mortgage for purposes of the Federal Truth in 

Lending Act. The principal of the hypothetical mortgage is 

the remaining outstanding balance of the certified mortgage indebtedness shown on the old MCC.

You must choose one method and use it consistently beginning with the first tax year for which 

you claim the credit based on the new MCC.

As part of your tax records, you should keep your 

old MCC and the schedule of payments for your 

old mortgage.

Basis

Basis is your starting point for figuring a gain or loss if you 

later sell your home, or for figuring depreciation if you later 

use part of your home for business purposes or for rent.

While you own your home, you may add certain items 

to your basis. You may subtract certain other items from 

your basis. These items are called adjustments to basis 

and are explained later under Adjusted Basis.

It is important that you understand these terms when 

you first acquire your home because you must keep track 

of your basis and adjusted basis during the period you 

CAUTION

!

TIP

own your home. You must also keep records of the events 

that affect basis or adjusted basis. See Keeping Records, 

later.

Figuring Your Basis

How you figure your basis depends on how you acquire 

your home. Generally, if you buy or build your home, your 

cost is your basis. If you receive your home as a gift, your 

basis is usually the same as the adjusted basis of the person who gave you the property. If you inherit your home 

from a decedent, different rules apply depending on the 

date of the decedent's death. Each of these topics is discussed later.

Property transferred from a spouse. If your home is 

transferred to you from your spouse, or from your former 

spouse as a result of a divorce, your basis is the same as 

your spouse's (or former spouse's) adjusted basis just before the transfer. Pub. 504, Divorced or Separated Individuals, fully discusses transfers between spouses.

Cost as Basis

The cost of your home, whether you purchased it or constructed it, is the amount you paid for it, including any debt 

you assumed.

The cost of your home includes most settlement or 

closing costs you paid when you bought the home. If you 

built your home, your cost includes most closing costs 

paid when you bought the land or settled on your mortgage. See Settlement or closing costs, later.

If you elect to deduct the sales taxes on the purchase or construction of your home as an itemized deduction on Schedule A (Form 1040), you 

can't include the sales taxes as part of your cost basis in 

the home.

Purchase. The basis of a home you bought is the amount 

you paid for it. This usually includes your down payment 

and any debt you assumed. The basis of a cooperative 

apartment is the amount you paid for your shares in the 

corporation that owns or controls the property. This 

amount includes any purchase commissions or other 

costs of acquiring the shares.

Construction. If you contracted to have your home built 

on land that you own, your basis in the home is your basis 

in the land plus the amount you paid to have the home 

built. This includes the cost of labor and materials, the 

amount you paid the contractor, any architect's fees, building permit charges, utility meter and connection charges, 

and legal fees that are directly connected with building 

your home. If you built all or part of your home yourself, 

your basis is the total amount it cost you to build it. You 

can't include in basis the value of your own labor or any 

other labor for which you didn't pay.

Real estate taxes. Real estate taxes are usually divided 

so that you and the seller each pay taxes for the part of the 

CAUTION

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14 Publication 530 (2023)
property tax year that each owned the home. See Real estate taxes paid at settlement or closing under State and 

Local Real Estate Taxes, earlier, to figure the real estate 

taxes you paid or are considered to have paid.

If you pay any part of the seller's share of the real estate 

taxes (the taxes up to the date of sale), and the seller 

didn't reimburse you, add those taxes to your basis in the 

home. You can't deduct them as taxes paid.

If the seller paid any of your share of the real estate 

taxes (the taxes beginning with the date of sale), you can 

still deduct those taxes. Don’t include those taxes in your 

basis. If you didn't reimburse the seller, you must reduce 

your basis by the amount of those taxes.

Example 1. You bought your home on September 1, 

2023. The property tax year in your area is the calendar 

year, and the tax is due on August 15. The real estate 

taxes on the home you bought were $1,275 for the year 

and had been paid by the seller on August 15. You didn't 

reimburse the seller for your share of the real estate taxes 

from September 1 through December 31. You must reduce the basis of your home by the $426 [(122 ÷ 365) × 

$1,275] the seller paid for you. You can deduct your $426 

share of real estate taxes on your return for the year you 

purchased your home.

Example 2. You bought your home on May 3, 2023. 

The property tax year in your area is the calendar year. 

The taxes for the previous year are assessed on January 

2 and are due on May 31 and November 30. Under state 

law, the taxes become a lien on May 31. You agreed to 

pay all taxes due after the date of sale. The taxes due in 

2023 for 2022 were $1,375. The taxes due in 2024 for 

2023 will be $1,425.

You can't deduct any of the taxes paid in 2023 because 

they relate to the 2022 property tax year and you didn't 

own the home until 2023. Instead, you add the $1,375 to 

the cost (basis) of your home.

You owned the home in 2023 for 243 days (May 3 to 

December 31), so you can take a tax deduction on your 

2024 return of $946 [(243 ÷ 365) × $1,425] paid in 2024 

for 2023. You add the remaining $479 ($1,425 − $946) of 

taxes paid in 2024 to the cost (basis) of your home.

Settlement or closing costs. If you bought your home, 

you probably paid settlement or closing costs in addition 

to the contract price. These costs are divided between you 

and the seller according to the sales contract, local custom, or understanding of the parties. If you built your 

home, you probably paid these costs when you bought the 

land or settled on your mortgage.

The only settlement or closing costs you can deduct 

are home mortgage interest and certain real estate taxes. 

You deduct them in the year you buy your home if you 

itemize your deductions. You can add certain other settlement or closing costs to the basis of your home.

Items added to basis. You can include in your basis 

the settlement fees and closing costs you paid for buying 

your home. A fee is for buying the home if you would have 

had to pay it even if you paid cash for the home.

The following are some of the settlement fees and closing costs that you can include in the original basis of your 

home.

• Abstract fees (abstract of title fees).

• Charges for installing utility services.

• Legal fees (including fees for the title search and preparation of the sales contract and deed).

• Recording fees.

• Surveys.

• Transfer or stamp taxes.

• Owner's title insurance.

• Any amount the seller owes that you agree to pay, 

such as back taxes or interest, recording or mortgage 

fees, cost for improvements or repairs, and sales commissions.

If the seller actually paid for any item for which you are 

liable and for which you can take a deduction (such as 

your share of the real estate taxes for the year of sale), 

you must reduce your basis by that amount unless you are 

charged for it in the settlement.

Items not added to basis and not deductible. Here 

are some settlement and closing costs that you can't deduct or add to your basis.

1. Fire insurance premiums.

2. Charges for using utilities or other services related to 

occupancy of the home before closing.

3. Rent for occupying the home before closing.

4. Charges connected with getting or refinancing a mortgage loan, such as:

a. Loan assumption fees,

b. Cost of a credit report,

c. Fee for an appraisal required by a lender, and

d. Mortgage insurance premiums.

Points paid by seller. If you bought your home after 

April 3, 1994, you must reduce your basis by any points 

paid for your mortgage by the person who sold you your 

home.

If you bought your home after 1990 but before April 4, 

1994, you must reduce your basis by seller-paid points 

only if you deducted them. See Points, earlier, for the rules 

on deducting points.

Gift

To figure the basis of property you receive as a gift, you 

must know its adjusted basis (defined later) to the donor 

just before it was given to you, its fair market value at the 

time it was given to you, and any gift tax paid on it.

Fair market value. Fair market value (FMV) is the price 

at which property would change hands between a willing 

buyer and a willing seller, neither being under any 

Publication 530 (2023) 15
compulsion to buy or sell and who both have a reasonable 

knowledge of all the necessary facts.

Donor's adjusted basis is more than FMV. If someone 

gave you your home and the donor's adjusted basis, when 

it was given to you, was more than the FMV, your basis at 

the time of receipt is the same as the donor's adjusted basis.

Disposition basis. If the donor's adjusted basis at the 

time of the gift is more than the FMV, your basis (plus or 

minus any required adjustments; see Adjusted Basis, 

later) when you dispose of the property will depend on 

whether you have a gain or a loss.

• Your basis for figuring a gain is the same as the donor's adjusted basis.

• Your basis for figuring a loss is the FMV when you received the gift.

If you use the donor's adjusted basis to figure a gain and it 

results in a loss, then you must use the FMV (at the time of 

the gift) to refigure the loss. However, if using the FMV results in a gain, then you have neither a gain nor a loss.

Example 1. Andrew received a house as a gift from 

Ishmael (the donor). At the time of the gift, the home had 

an FMV of $80,000. Ishmael's adjusted basis was 

$100,000. After he received the house, no events occurred to increase or decrease the basis. If Andrew sells the 

house for $120,000, he will have a $20,000 gain because 

he must use the donor's adjusted basis ($100,000) at the 

time of the gift as his basis to figure the gain.

Example 2. The facts are the same as in Example 1, 

except this time Andrew sells the house for $70,000. He 

will have a loss of $10,000 because he must use the FMV 

($80,000) at the time of the gift as his basis to figure the 

loss.

Example 3. The facts are the same as in Example 1, 

except this time Andrew sells the house for $90,000. Initially, he figures the gain using Ishmael's adjusted basis 

($100,000), which results in a loss of $10,000. Because it 

is a loss, Andrew must now recalculate the loss using the 

FMV ($80,000), which results in a gain of $10,000. So in 

this situation, Andrew will have neither a gain nor a loss.

Donor's adjusted basis equal to or less than the FMV. 

If someone gave you your home after 1976 and the donor's adjusted basis, when it was given to you, was equal 

to or less than the FMV, your basis at the time of receipt is 

the same as the donor's adjusted basis, plus the part of 

any federal gift tax paid that is due to the net increase in 

value of the home.

Part of federal gift tax due to net increase in value. 

Figure the part of the federal gift tax paid that is due to the 

net increase in value of the home by multiplying the total 

federal gift tax paid by a fraction. The numerator (top part) 

of the fraction is the net increase in the value of the home, 

and the denominator (bottom part) is the value of the 

home for gift tax purposes after reduction for any annual 

exclusion and marital or charitable deduction that applies 

to the gift. The net increase in the value of the home is its 

FMV minus the adjusted basis of the donor.

Pub. 551 gives more information, including examples, 

on figuring your basis when you receive property as a gift.

Inheritance

Your basis in a home you inherited is generally the FMV of 

the home on the date of the decedent's death or on the alternative valuation date if the personal representative for 

the estate chooses to use alternative valuation.

If an estate tax return was filed, your basis is generally 

the value of the home listed on the estate tax return. If you 

received a Schedule A (Form 8971) statement from an executor of an estate or other person required to file an estate tax return after July 2015, you may be required to report a basis consistent with the estate tax value of the 

property.

If an estate tax return wasn't filed, your basis is the appraised value of the home at the decedent's date of death 

for state inheritance or transmission taxes.

For more information on consistent basis reporting, see 

Column (e)—Cost or Other Basis in the Instructions for 

Form 8949. For more information on basis of inherited 

property generally, see Pub. 551 and Pub. 559.

If you inherited your home from someone who died in 

2010, and the executor of the decedent's estate made the 

election to file Form 8939, Allocation of Increase in Basis 

for Property Acquired From a Decedent, refer to the information provided by the executor or see Pub. 4895, Tax 

Treatment of Property Acquired From a Decedent Dying in 

2010, available at IRS.gov/Pub/IRS-Prior/p4895-2011.pdf.

16 Publication 530 (2023)
Adjusted Basis

While you own your home, various events may take place 

that can change the original basis of your home. These 

events can increase or decrease your original basis. The 

result is called adjusted basis. See Table 3 for a list of 

some of the items that can adjust your basis.

Adjusted Basis

This table lists examples of some items that will generally increase or decrease your basis in your home. It isn’t intended 

to be all-inclusive.

Table 3.

Increases to Basis Decreases to Basis

• Improvements:

– Putting an addition on your home

– Replacing an entire roof

– Paving your driveway

– Installing central air conditioning

– Rewiring your home

• Assessments for local improvements

(see Assessments for local benefits under What You Can and 

Can't Deduct, earlier)

• Amounts spent to restore damaged property

• Insurance or other reimbursement for casualty losses 

• Deductible casualty loss not covered by insurance

• Payments received for easement or right-of-way granted

• Depreciation allowed or allowable if home is used for 

business or rental purposes

• Value of subsidy for energy conservation measure excluded 

from income

• Adoption tax benefits

• The increase to the basis of the home which would be 

allowed due to the installation of any qualifying energy 

efficient properties must be reduced by any credit taken 

against the income tax. Also, see the Instructions for Form 

5695. 

Assessments for local benefits

Improvements. An improvement materially adds to the 

value of your home, considerably prolongs its useful life, 

or adapts it to new uses. You must add the cost of any improvements to the basis of your home. You can't deduct 

these costs.

Improvements include putting a recreation room in your 

unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, and paving your driveway.

Amount added to basis. The amount you add to your 

basis for improvements is your actual cost. This includes 

all costs for material and labor, except your own labor, and 

all expenses related to the improvement. For example, if 

you had your lot surveyed to put up a fence, the cost of the 

survey is a part of the cost of the fence.

You must also add to your basis state and local assessments for improvements such as streets and sidewalks if 

they increase the value of the property. These assessments are discussed earlier under State and Local Real 

Estate Taxes.

Improvements no longer part of home. Your home's 

adjusted basis doesn't include the cost of any improvements that are replaced and are no longer part of the 

home.

Example. You put wall-to-wall carpeting in your home 

15 years ago. Later, you replaced that carpeting with new 

wall-to-wall carpeting. The cost of the old carpeting you 

replaced is no longer part of your home's adjusted basis.

Repairs versus improvements. A repair keeps your 

home in an ordinary, efficient operating condition. It 

doesn't add to the value of your home or prolong its life. 

Repairs include repainting your home inside or outside, 

fixing your gutters or floors, fixing leaks or plastering, and 

replacing broken window panes. You can't deduct repair 

costs and generally can't add them to the basis of your 

home.

However, repairs that are done as part of an extensive 

remodeling or restoration of your home are considered improvements. You add them to the basis of your home.

Records to keep. You can use Table 4 as a guide to 

help you keep track of improvements to your home. Also 

see Keeping Records below.

Energy conservation subsidy. If a public utility gives 

you (directly or indirectly) a subsidy for the purchase or installation of an energy conservation measure for your 

home, don’t include the value of that subsidy in your income. You must reduce the basis of your home by that 

value.

An energy conservation measure is an installation or 

modification primarily designed to reduce consumption of 

electricity or natural gas or to improve the management of 

energy demand.

Adoption tax benefits. If you claim an adoption credit for 

the cost of improvements you added to the basis of your 

home, decrease the basis of your home by the credit allowed. This also applies to amounts you received under 

an employer's adoption assistance program and excluded 

from income. For more information, see Form 8839, Qualified Adoption Expenses.

Keeping Records

Keeping full and accurate records is vital to properly report your income and expenses, to support 

your deductions and credits, and to know the basis or adjusted basis of your home. These records include 

your purchase contract and settlement papers if you 

bought the property, or other objective evidence if you acquired it by gift, inheritance, or similar means. You should 

RECORDS

Publication 530 (2023) 17
keep any receipts, canceled checks, and similar evidence 

for improvements or other additions to the basis. In addition, you should keep track of any decreases to the basis 

such as those listed in Table 3.

How to keep records. How you keep records is up to 

you, but they must be clear and accurate and must be 

available to the IRS.

How long to keep records. You must keep your records 

for as long as they are important for meeting any provision 

of the federal tax law.

Keep records that support an item of income, a deduction, or a credit appearing on a return until the period of 

limitations for the return runs out. (A period of limitations is 

the period of time after which no legal action can be 

brought.) For assessment of tax you owe, this is generally 

3 years from the date you filed the return. For filing a claim 

for credit or refund, this is generally 3 years from the date 

you filed the original return, or 2 years from the date you 

paid the tax, whichever is later. Returns filed before the 

due date are treated as filed on the due date.

You may need to keep records relating to the basis of 

property (discussed earlier) for longer than the period of 

limitations. Keep those records as long as they are important in figuring the basis of the original or replacement 

property. Generally, this means for as long as you own the 

property and, after you dispose of it, for the period of limitations that applies to you.

18 Publication 530 (2023)
Record of Home Improvements

Keep for Your Records

Keep this for your records. Also, keep receipts or other proof of improvements.

CAUTION

!

Remove from this record any improvements that are no longer part of your main home. For example, if you put wall-to-wall 

carpeting in your home and later replace it with new wall-to-wall carpeting, remove the cost of the first carpeting. 

(a)

Type of Improvement

(b)

Date

(c)

Amount

(a)

Type of Improvement

(b)

Date

(c)

Amount

Additions:

Heating & Air

 Conditioning:

Bedroom Heating system

Bathroom Central air conditioning

Deck Furnace

Garage Duct work

Porch Central humidifier

Patio Filtration system

Storage shed Other

Fireplace

Other Electrical:

Lawn & Grounds:

Lighting fixtures

Wiring upgrades

Landscaping Other

Driveway

Walkway Plumbing:

Fences Water heater

Retaining wall Soft water system

Sprinkler system Filtration system

Swimming pool Other

Exterior lighting

Other Insulation:

Communications:

Attic

Walls

Satellite dish Floors

Intercom Pipes and duct work

Security system Other

Other

Miscellaneous:

Interior 

Improvements:

Storm windows and 

doors

Built-in appliances

Roof Kitchen modernization

Central vacuum Bathroom modernization

Other Flooring

Wall-to-wall carpeting

Other

Table 4.

Publication 530 (2023) 19
How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, 

forms, or instructions, go to IRS.gov to find resources that 

can help you right away.

Preparing and filing your tax return. After receiving all 

your wage and earnings statements (Forms W-2, W-2G, 

1099-R, 1099-MISC, 1099-NEC, etc.); unemployment 

compensation statements (by mail or in a digital format) or 

other government payment statements (Form 1099-G); 

and interest, dividend, and retirement statements from 

banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you 

qualify for free tax preparation, or hire a tax professional to 

prepare your return.

Free options for tax preparation. Your options for preparing and filing your return online or in your local community, if you qualify, include the following.

• Free File. This program lets you prepare and file your 

federal individual income tax return for free using software or Free File Fillable Forms. However, state tax 

preparation may not be available through Free File. Go 

to IRS.gov/FreeFile to see if you qualify for free online 

federal tax preparation, e-filing, and direct deposit or 

payment options.

• VITA. The Volunteer Income Tax Assistance (VITA) 

program offers free tax help to people with 

low-to-moderate incomes, persons with disabilities, 

and limited-English-speaking taxpayers who need 

help preparing their own tax returns. Go to IRS.gov/

VITA, download the free IRS2Go app, or call 

800-906-9887 for information on free tax return preparation.

• TCE. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly 

those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors. 

Go to IRS.gov/TCE or download the free IRS2Go app 

for information on free tax return preparation.

• MilTax. Members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military 

OneSource. For more information, go to 

MilitaryOneSource (MilitaryOneSource.mil/MilTax).

Also, the IRS offers Free Fillable Forms, which can 

be completed online and then e-filed regardless of income.

Using online tools to help prepare your return. Go to 

IRS.gov/Tools for the following.

• The Earned Income Tax Credit Assistant (IRS.gov/

EITCAssistant) determines if you’re eligible for the 

earned income credit (EIC).

• The Online EIN Application (IRS.gov/EIN) helps you 

get an employer identification number (EIN) at no 

cost.

• The Tax Withholding Estimator (IRS.gov/W4App) 

makes it easier for you to estimate the federal income 

tax you want your employer to withhold from your paycheck. This is tax withholding. See how your withholding affects your refund, take-home pay, or tax due.

• The First-Time Homebuyer Credit Account Look-up 

(IRS.gov/HomeBuyer) tool provides information on 

your repayments and account balance.

• The Sales Tax Deduction Calculator (IRS.gov/

SalesTax) figures the amount you can claim if you 

itemize deductions on Schedule A (Form 1040).

Getting answers to your tax questions. On 

IRS.gov, you can get up-to-date information on 

current events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that 

will ask you questions and, based on your input, provide answers on a number of tax topics.

• IRS.gov/Forms: Find forms, instructions, and publications. You will find details on the most recent tax 

changes and interactive links to help you find answers 

to your questions.

• You may also be able to access tax information in your 

e-filing software.

Need someone to prepare your tax return? There are 

various types of tax return preparers, including enrolled 

agents, certified public accountants (CPAs), accountants, 

and many others who don’t have professional credentials. 

If you choose to have someone prepare your tax return, 

choose that preparer wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification 

number (PTIN).

Although the tax preparer always signs the return, 

you're ultimately responsible for providing all the 

information required for the preparer to accurately 

prepare your return and for the accuracy of every item reported on the return. Anyone paid to prepare tax returns 

for others should have a thorough understanding of tax 

matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure 

W-2 filing options to CPAs, accountants, enrolled agents, 

and individuals who process Form W-2, Wage and Tax 

CAUTION

!

20 Publication 530 (2023)
Statement, and Form W-2c, Corrected Wage and Tax 

Statement.

IRS social media. Go to IRS.gov/SocialMedia to see the 

various social media tools the IRS uses to share the latest 

information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our 

highest priority. We use these tools to share public information with you. Don’t post your social security number 

(SSN) or other confidential information on social media 

sites. Always protect your identity when using any social 

networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, 

Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal 

(IRSVideos.gov) contains video and audio presentations 

for individuals, small businesses, and tax professionals.

Online tax information in other languages. You can 

find information on IRS.gov/MyLanguage if English isn’t 

your native language.

Free Over-the-Phone Interpreter (OPI) Service. The 

IRS is committed to serving taxpayers with limited-English 

proficiency (LEP) by offering OPI services. The OPI Service is a federally funded program and is available at Taxpayer Assistance Centers (TACs), most IRS offices, and 

every VITA/TCE tax return site. The OPI Service is accessible in more than 350 languages.

Accessibility Helpline available for taxpayers with 

disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and 

future accessibility products and services available in alternative media formats (for example, braille, large print, 

audio, etc.). The Accessibility Helpline does not have access to your IRS account. For help with tax law, refunds, or 

account-related issues, go to IRS.gov/LetUsHelp.

Note. Form 9000, Alternative Media Preference, or 

Form 9000(SP) allows you to elect to receive certain types 

of written correspondence in the following formats.

• Standard Print.

• Large Print.

• Braille.

• Audio (MP3).

• Plain Text File (TXT).

• Braille Ready File (BRF).

Disasters. Go to IRS.gov/DisasterRelief to review the 

available disaster tax relief.

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print all the forms, instructions, and publications you may need. Or, you can go to 

IRS.gov/OrderForms to place an order.

Getting tax publications and instructions in eBook 

format. Download and view most tax publications and instructions (including the Instructions for Form 1040) on 

mobile devices as eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple's iBooks for 

iPad. Our eBooks haven’t been tested on other dedicated 

eBook readers, and eBook functionality may not operate 

as intended.

Access your online account. Go to IRS.gov/Account to 

securely access information about your federal tax account.

• View the amount you owe and a breakdown by tax 

year.

• See payment plan details or apply for a new payment 

plan.

• Make a payment or view 5 years of payment history 

and any pending or scheduled payments.

• Access your tax records, including key data from your 

most recent tax return, and transcripts.

• View digital copies of select notices from the IRS.

• Approve or reject authorization requests from tax professionals.

• View your address on file or manage your communication preferences.

Get a transcript of your return. With an online account, 

you can access a variety of information to help you during 

the filing season. You can get a transcript, review your 

most recently filed tax return, and get your adjusted gross 

income. Create or access your online account at IRS.gov/

Account.

Tax Pro Account. This tool lets your tax professional 

submit an authorization request to access your individual 

taxpayer IRS online account. For more information, go to 

IRS.gov/TaxProAccount.

Using direct deposit. The safest and easiest way to receive a tax refund is to e-file and choose direct deposit, 

which securely and electronically transfers your refund directly into your financial account. Direct deposit also 

avoids the possibility that your check could be lost, stolen, 

destroyed, or returned undeliverable to the IRS. Eight in 

10 taxpayers use direct deposit to receive their refunds. If 

you don’t have a bank account, go to IRS.gov/

DirectDeposit for more information on where to find a bank 

or credit union that can open an account online.

Reporting and resolving your tax-related identity 

theft issues. 

• Tax-related identity theft happens when someone 

steals your personal information to commit tax fraud. 

Publication 530 (2023) 21
Your taxes can be affected if your SSN is used to file a 

fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by 

email, text messages (including shortened links), telephone calls, or social media channels to request or 

verify personal or financial information. This includes 

requests for personal identification numbers (PINs), 

passwords, or similar information for credit cards, 

banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft 

Central webpage, for information on identity theft and 

data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or 

stolen or you suspect you’re a victim of tax-related 

identity theft, you can learn what steps you should 

take.

• Get an Identity Protection PIN (IP PIN). IP PINs are 

six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your 

SSN. To learn more, go to IRS.gov/IPPIN.

Ways to check on the status of your refund. 

• Go to IRS.gov/Refunds.

• Download the official IRS2Go app to your mobile device to check your refund status.

• Call the automated refund hotline at 800-829-1954.

The IRS can’t issue refunds before mid-February 

for returns that claimed the EIC or the additional 

child tax credit (ACTC). This applies to the entire 

refund, not just the portion associated with these credits.

Making a tax payment. Payments of U.S. tax must be 

remitted to the IRS in U.S. dollars. Digital assets are not 

accepted. Go to IRS.gov/Payments for information on how 

to make a payment using any of the following options.

• IRS Direct Pay: Pay your individual tax bill or estimated 

tax payment directly from your checking or savings account at no cost to you.

• Debit Card, Credit Card, or Digital Wallet: Choose an 

approved payment processor to pay online or by 

phone.

• Electronic Funds Withdrawal: Schedule a payment 

when filing your federal taxes using tax return preparation software or through a tax professional.

• Electronic Federal Tax Payment System: Best option 

for businesses. Enrollment is required.

• Check or Money Order: Mail your payment to the address listed on the notice or instructions.

• Cash: You may be able to pay your taxes with cash at 

a participating retail store.

• Same-Day Wire: You may be able to do same-day 

wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

CAUTION

!

Note. The IRS uses the latest encryption technology to 

ensure that the electronic payments you make online, by 

phone, or from a mobile device using the IRS2Go app are 

safe and secure. Paying electronically is quick, easy, and 

faster than mailing in a check or money order.

What if I can’t pay now? Go to IRS.gov/Payments for 

more information about your options.

• Apply for an online payment agreement (IRS.gov/

OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once 

you complete the online process, you will receive immediate notification of whether your agreement has 

been approved.

• Use the Offer in Compromise Pre-Qualifier to see if 

you can settle your tax debt for less than the full 

amount you owe. For more information on the Offer in 

Compromise program, go to IRS.gov/OIC.

Filing an amended return. Go to IRS.gov/Form1040X 

for information and updates.

Checking the status of your amended return. Go to 

IRS.gov/WMAR to track the status of Form 1040-X amended returns.

It can take up to 3 weeks from the date you filed 

your amended return for it to show up in our system, and processing it can take up to 16 weeks.

Understanding an IRS notice or letter you’ve received. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

Responding to an IRS notice or letter. You can now 

upload responses to all notices and letters using the 

Document Upload Tool. For notices that require additional 

action, taxpayers will be redirected appropriately on 

IRS.gov to take further action. To learn more about the 

tool, go to IRS.gov/Upload.

Note. You can use Schedule LEP (Form 1040), Request for Change in Language Preference, to state a preference to receive notices, letters, or other written communications from the IRS in an alternative language. You may 

not immediately receive written communications in the requested language. The IRS’s commitment to LEP taxpayers is part of a multi-year timeline that began providing 

translations in 2023. You will continue to receive communications, including notices and letters, in English until they 

are translated to your preferred language.

Contacting your local TAC. Keep in mind, many questions can be answered on IRS.gov without visiting a TAC. 

Go to IRS.gov/LetUsHelp for the topics people ask about 

most. If you still need help, TACs provide tax help when a 

tax issue can’t be handled online or by phone. All TACs 

now provide service by appointment, so you’ll know in advance that you can get the service you need without long 

wait times. Before you visit, go to IRS.gov/TACLocator to 

find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app, 

CAUTION

!

22 Publication 530 (2023)
under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate Service (TAS) 

Is Here To Help You

What Is TAS?

TAS is an independent organization within the IRS that 

helps taxpayers and protects taxpayer rights. TAS strives 

to ensure that every taxpayer is treated fairly and that you 

know and understand your rights under the Taxpayer Bill 

of Rights.

How Can You Learn About Your Taxpayer 

Rights?

The Taxpayer Bill of Rights describes 10 basic rights that 

all taxpayers have when dealing with the IRS. Go to 

TaxpayerAdvocate.IRS.gov to help you understand what 

these rights mean to you and how they apply. These are 

your rights. Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you can’t resolve 

with the IRS. And their service is free. If you qualify for 

their assistance, you will be assigned to one advocate 

who will work with you throughout the process and will do 

everything possible to resolve your issue. TAS can help 

you if:

• Your problem is causing financial difficulty for you, 

your family, or your business;

• You face (or your business is facing) an immediate 

threat of adverse action; or

• You’ve tried repeatedly to contact the IRS but no one 

has responded, or the IRS hasn’t responded by the 

date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, 

and Puerto Rico. To find your advocate’s number:

• Go to TaxpayerAdvocate.IRS.gov/Contact-Us;

• Download Pub. 1546, The Taxpayer Advocate Service 

Is Your Voice at the IRS, available at IRS.gov/pub/irspdf/p1546.pdf;

• Call the IRS toll free at 800-TAX-FORM 

(800-829-3676) to order a copy of Pub. 1546;

• Check your local directory; or

• Call TAS toll free at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect 

many taxpayers. If you know of one of these broad issues, 

report it to TAS at IRS.gov/SAMS. Be sure to not include 

any personal taxpayer information.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level 

and who need to resolve tax problems with the IRS. LITCs 

can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, 

LITCs can provide information about taxpayer rights and 

responsibilities in different languages for individuals who 

speak English as a second language. Services are offered 

for free or a small fee. For more information or to find an 

LITC near you, go to the LITC page at 

TaxpayerAdvocate.IRS.gov/LITC or see IRS Pub. 4134, 

Low Income Taxpayer Clinic List, at IRS.gov/pub/irs-pdf/

p4134.pdf.

Publication 530 (2023) 23
To help us develop a more useful index, please let us know if you have ideas for index entries.

Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Adjusted basis 17

Assessments:

For local benefits 5

Homeowners association 5

Assistance (See Tax help)

B

Basis 14

C

Certificate, mortgage credit 12

Construction 14

Cooperatives 5, 7

Cost basis 14

Credit:

Mortgage interest 12

D

Deduction:

Home mortgage interest 6

Real estate taxes 4

Disaster loans 7

E

Escrow accounts 4

F

Fire insurance premiums 15

Form:

1098 11

8396 12

G

Gift of home 15

Ground rent 6

H

Home:

Acquisition debt 11

Inherited 16

Mortgage interest 6

Purchase of 14

Received as gift 15

Homeowners association 

assessments 5

House payment 3

Housing allowance, minister or 

military 3

I

Improvements 17, 19

Inheritance 16

Insurance 15

Interest:

Home mortgage 6

Prepaid 6

K

Keeping records 17

L

Late payment charge 6

Local benefits, assessments for 5

M

MCC (Mortgage credit 

certificate) 12

Minister's or military housing 

allowance 3

Mortgage credit certificate 

(MCC) 12

Mortgage debt forgiveness 11

Mortgage interest:

Credit 12

Deduction 6

Late payment charge 6

Paid at settlement 7

Refund 6, 11

Statement 11

Mortgage prepayment penalty 6

N

Nondeductible payments 4, 15

P

Points 7

Prepaid interest 6

Publications (See Tax help)

R

Recordkeeping 17

Refund of:

Mortgage interest 6, 11

Real estate taxes 4

Repairs 17

S

Sales taxes 5

SBA Disaster loans 7

Settlement or closing costs:

Basis of home 15

Mortgage interest 7

Real estate taxes 4, 14

Stamp taxes 5

State and local real estate taxes 4

Deductible 4

Paid at settlement or closing 4

Refund or rebate 4

Statement, mortgage interest 11

T

Tax help 20

Taxes

Real estate 5

Sales taxes 5

State and local real estate 4

Transfer taxes 5

W

What you can and can’t deduct 3

24 Publication 530 (2023)