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VA funding fees

Level 1

Taxpayer refinanced home in 2019, are the VA funding fees tax deductible? Didn't received a form 1098 with the mortgage insurance amount on box 5.  The VA funding fee is shown on the closing escrow statement for 2019.  The VA fee was also included in his new loan.

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4 Replies 4
Level 8

Qualified mortgage insurance.

Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs,
the Federal Housing Administration, or the Rural Housing Service, and private mortgage insurance (as defined in section 2 of the Homeowners Protection Act of 1998, as in effect on December 20, 2006). Mortgage insurance provided by the Department of Veterans Affairs is commonly known as
a funding fee. If provided by the Rural Housing Service, it is commonly known as a guarantee
fee. The funding fee and guarantee fee can either be included in the amount of the loan or
paid in full at the time of closing. These fees can be deducted fully in 2019 if the mortgage insurance contract was issued in 2019. Contact the mortgage insurance issuer to determine the deductible amount if it is not reported in box 5 of Form 1098.

https://www.irs.gov/pub/irs-pdf/p936.pdf

Level 1

Thank you for the response.  What to do if the client did contact the mortgage insurance issuer to determine the deductible amount because it was not reported in box 5 of Form 1098 and the mortgage insurance issuer said they have no idea?

The VA funding fee is on the escrow closing statement and it was added to the new loan.

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Level 8

My last VA home loan was in 2011 and I took it all in that year.  Right or wrong never heard a word from the Feds.

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Level 1

Thank you again for your response!!!!

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