Contents Introduction  ........................................ 1 What You Can and Cannot Deduct  .. 2 Real Estate Taxes  .......................... 2 Home Mortgage Interest  ................. 3 Mortgage Interest Credit   ................... 6 Figuring the Credit  .......................... 6 Basis  .................................................... 7 Figuring Your Basis  ........................ 7 Adjusted Basis  ................................ 9 Keeping Records  ................................ 9 How To Get More Information  .......... 9 Index  .................................................... 12 Important Changes for 1999 Pending   legislation. Legislation  affecting the  mortgage interest credit was pending at the time of printing. For guidance, visit the IRS's web site at  www.irs.gov or see the Form    8396    instructions.    Publication    553, Highlights  of  1999  Tax  Changes,  will  also contain information about this and other tax law changes. Photographs   of   missing   children. The Internal Revenue Service is a proud partner with the National Center for Missing and Ex- ploited   Children.   Photographs   of   missing children selected by the Center may appear in this publication on pages that would other- wise  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. Important Reminder Limit   on   itemized   deductions. Certain itemized   deductions   (including   real   estate taxes and home mortgage interest) are limited if your adjusted gross income is more than $126,600 ($63,300 if you are married filing separately).  For  more  information,  see  the instructions for Schedule A (Form 1040). Introduction This publication provides tax information for first-time homeowners. Your first home may be a mobile home, a single-family house, a townhouse, a condominium, or a cooperative apartment. The following topics are explained. •  How you treat items such as settlement and closing costs, real estate taxes, home mortgage interest, and repairs. •  What you can and cannot deduct on your tax return. •  The tax credit you can claim if you re- ceived a mortgage credit certificate when you bought your home. Department of the Treasury Internal Revenue Service Publication 530 Cat. No. 15058k Tax Information for First-Time Homeowners For use in preparing 1999  Returns