Quote:
Originally posted by synic213
Thanks for the reply.
So in regards to a house refinance, if I paid 2 points for the loan, and no straight fees, I should be able to write off the 2 points? And I can just include the monetary value associated with these points on the same form (schedule A?) that I claim my mortgage interest on? Also unclear as to whether this is a one time deal, this year only, where I claim the entire 2 points, or if I write off a portion of the "point fees" every year for the life of the loan. Any clarification would be appreciated.
Thanks again.
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You'll be able to write off the points. You say "2 points" so I'm assuming it's 2% of the loan cost (eg, 2% of $150k is $3k in points). You'll do what's called "amortizing" the points over the life of the loan.
So....
If the loan is 15 years, aside from the normal interest expense deduction, you also get $200 of deductions for point amortization that will go on your schedule A ($3k / 15). This gets prorated monthly if you refinanced during the year. So if you refied 7/1/03, you get $100 this year and $200 for years 2-15, and $100 the last year.
Now, if you still ahd points that you haven't written off yet and you refinance again, then you get to write off the full amount of the old points as well as amortize any new ones.
For 2003, it goes on line 12 of Schedule A.
http://www.irs.gov/pub/irs-pdf/p936.pdf
Page 5 has got your point info, and it goes to page 7 as well. Turbotax, although I haven't worked with it in like 10 years, should have a simple way to enter in the info. Check the help menu if you're still confused.
And you paid no other fees? What you're thinking of as "points" might not be points. The only points that are deductible are points paid to lower your interest rate. Unless you did a "no-cost" refi, where the lending costs are buried as a higher rate.