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Deducting points paid on
home mortgages
You are
allowed to write off financing charges or "points" you
pay to obtain a mortgage on a principal residence in the year
of purchase. However, if you buy the home late in the year,
you may not have enough itemized deductions to get above
the standard deduction. The IRS now says you can choose to amortize (write
off) points over the life of the loan, rather
than deduct them in the year you bought the home. If you
itemize your deduction, you'll benefit from the partial deduction
of points each year. Also, you can write off the remaining
balance in the year you sell or refinance your home.
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