AskTaxGuru.com Junior Member,
randystoker, asked:
I deducted a VA funding fee I paid in '09 on my 2009 tax return.
According to publication 936, VA mortgage insurance is known as a
funding fee and is fully deductible in the year paid as qualified
mortgage insurance. However, this year I received a letter from the IRS
stating that my mortgage insurance deduction for '09 was corrected to
$0 and that I owed more than $4K in back taxes for 2009. I replied with
a copy of my HUD-1 showing the VA funding fee paid and the page from
IRS pub. 936 showing that the VA fee paid was considered mortgage
insurance and was fully deductible in the year paid. The IRS replied
back with a letter requesting to see a copy of my "corrected" 1098
showing the mortgage insurance paid. However, my bank (Chase) replied
in an e-mail that they do not put VA funding fees on their 1098's (even
though I referenced IRS instructions for 1098 that these fees should be
included in box 4 if over $600). Chase said they were sorry and could
not comply with my request for a corrected 1098. My question, can the
deduction for mortgage insurance be taken if not on the 1098?
Click here to know what our tax gurus advised him.
AskTaxGuru.com Junior Member,
randystoker, asked:
I deducted a VA funding fee I paid in '09 on my 2009 tax return.
According to publication 936, VA mortgage insurance is known as a
funding fee and is fully deductible in the year paid as qualified
mortgage insurance. However, this year I received a letter from the IRS
stating that my mortgage insurance deduction for '09 was corrected to
$0 and that I owed more than $4K in back taxes for 2009. I replied with
a copy of my HUD-1 showing the VA funding fee paid and the page from
IRS pub. 936 showing that the VA fee paid was considered mortgage
insurance and was fully deductible in the year paid. The IRS replied
back with a letter requesting to see a copy of my "corrected" 1098
showing the mortgage insurance paid. However, my bank (Chase) replied
in an e-mail that they do not put VA funding fees on their 1098's (even
though I referenced IRS instructions for 1098 that these fees should be
included in box 4 if over $600). Chase said they were sorry and could
not comply with my request for a corrected 1098. My question, can the
deduction for mortgage insurance be taken if not on the 1098?
