Points Paid by the Buyer

Discussion in 'US Taxes' started by Tax Tip, Oct 23, 2008.

  1. Tax Tip

    Tax Tip Guest

    A point is interest that has been pre-paid in an effort to "buy down"
    the fixed interest imposed on a mortgage.
    One point is 1% of your mortgage, and can usually lower your interest
    by .25%.

    In a property SALE (not refinance), if Points are Paid by the Buyer,
    The Buyer Must:

    For Personal Property - Deduct all points as mortgage interest on
    Schedule A

    For Rental Property - Deduct points over the life of the loan on
    Schedule E

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    Tax Tip, Oct 23, 2008
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