Are Mortgage Points Tax Deductible?
Mortgage points, otherwise known as loan origination fees or discount points, are tax deductible if certain conditions are met.
Generally, you cannot deduct the full amount of mortgage points in the year paid, as they are considered prepaid interest and must be deducted equally through the life of the loan, though there are exceptions.
Excerpt from IRS Publication 936.
Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan.
You can deduct home mortgage interest if all the following conditions are met.
You file Form 1040 and itemize deductions on Schedule A (Form 1040).
The mortgage is a secured debt on a qualified home in which you have an ownership interest. Secured Debt and Qualified Home are explained later.
Both you and the lender must intend that the loan be repaid.
For complete information and Publication 936, visit:
www.IRS.gov
Source: IRS.gov
