Q. I'm in the process of preparing my 1985 tax return, and since I purchased my first house last year, I do not fully understand what items are deductible for tax purposes. Could you give us a catalogue of these deductions?

A. This may be the last year for anyone to be able to predict -- with some certainty -- what is deductible and what is not. As you know, Congress is considering massive tax reform, although it does not appear that the basic homeowner deductions will be affected. I am delighted to assist you in preparing your income tax returns. All too often, we forget legitimate deductions Congress has authorized for homeowners to offset the rising costs of our economy.

This is an effort to list the various deductions available to the average homeowner. But everyone's tax returns are different, and you should review your tax situation with your accountant and your tax advisers. The additional cost of these professional services often is offset by considerable tax savings, and, in any event, the cost of these services is deductible.

You may legitimately deduct the following:

Mortgage interest. Your lender is required to give you an annual statement, breaking down your mortgage statement into principle and interest. The interest portion is deductible for tax purposes. Because you just purchased your house last year, I suspect there is an extra interest deduction that probably is not listed on the annual lender's statement: When you went to settlement you were charged on the settlement sheet (line 901, page 2) daily interest from the day you settled until the end of that month.

Let me illustrate this. If, for example, you settled on March 15, 1985, your first month's mortgage payment was probably due May 1. The payment that you made in May undoubtedly included interest for April. All lenders in this area charge interest in arrears. However, since you borrowed the money on March 15, the lender no doubt also charged you from the March 15 through March 31. That additional interest is deductible, but will not be reflected on the first annual statement from the lender.

Points (otherwise called loan origination fees, premium charges, maximum loan charges, or discounts). You may deduct these in full in the year of payment, provided, of course, that the amount of the points is consistent lending practices in the area in which the house is purchased. Additionally, it is advisable to have these points paid separately, but if you are unable to do so, you still should list them as deductible items.

Taxes. Real property taxes -- state, local or foreign -- can be deducted. Included are such items as local benefit taxes. If the owner of real property, for example, pays an assessment for a new street in front of his home, the special assessment is not deductible. The owner may, however, deduct as much of that assessment as is properly allocated to a maintenance and interest charge. If you receive such a special assessment, contact the taxing authority in the jurisdiction where your property is located to determine the breakdown of the amounts.

Real estate taxes. Real estate taxes that you pay are deductible in the year they are paid. If the lender pays taxes for you, you will be given an annual statement, including the amount of the taxes paid. It should be noted that taxes are deductible only in the year they are paid to the government; if you escrowed this year for next year's taxes you cannot take a deduction this year. This is, in my opinion, yet another reason for paying your own taxes, rather than permitting the lender to escrow them.

Once again, because you purchased your house last year, there is another potential deduction that can be found on the settlement sheet, (line 106, page1). When you went to settlement, depending on the time of year, it is possible that you reimbursed your sellers for the taxes that they had already prepaid. For example, if you settled in Maryland on March 15, no doubt the settlement sheet will reflect that you reimbursed the sellers for taxes that they had prepaid through the end of June. This, too, is a deductible item that should not be ignored.

There are other important items listed on your settlement sheet, although you cannot use them immediately for tax purposes. The following can be added to the purchase price of your home (called the adjusted purchase price) to be offset against profit when you later sell: Title examination. Title insurance. Survey cost.

Recording and transfer taxes.

Prior to 1964, the following were deductible, Now, however, you can only add them to the adjusted base of your house when you sell.

Appraisal fees.

Credit report.

Attorneys' fees.

Thus, it is important to keep your settlement sheet in a safe place. It will come in very handy when you later sell the property.

This list is not intended as a master list of all tax benefits available to homeowners. We have already discussed in previous columns the so-called "rollover." Under this device, if you sell your residence and within a two-year period purchase another property at a price equal to or greater than the selling price, you are entitled to defer (roll over) the profit until you sell your previous house.

Paying taxes has never been fun. However, every homeowner should carefully study all of the legitimate deductions available.