Can I deduct my settlement charges?

Q: We purchased our first home in 2003. I was wondering what I can deduct from my total fees such as origination fees, appraisal fee, administration fee's, recording and transfer fee's. In short, can I deduct my settlement charges? —Jon, Springfield

The following answer was provided by Barbara Damon, CPA, Edelstein & Company LLP.

A: The settlement fees are not deductible currently but are added to the basis of your house when you sell it. The exception would be for any points that you paid which would be deductible as interest and should be listed on the 1098 you received from the mortgage company.