Can I deduct a mortgage point on my taxes?

[suzannews]

Bought a house in May 2003 and we paid 1 point to get a better interest rate. Someone at work told me we could deduct it on our taxes but they were not sure how to do it. Any info?

 

[dvcfamily41801]

Yes I do know that your accountant will deduct that, and of course the interest. Not sure if it is the full point or if it is spread out over "x" years, make any sense??

 

[clh2]

On a house purchase, any points would be deductable at one time. (Sorry, I don't remember where that gets accounted for on the schedule A)

If you paid points for a refinance, the amount of the points would be amortized over the term of the mortgage. So, if you paid $1500 in points, for refinancing into a 15 year term, you would be able to deduct an additional $100 per year in additional interest. Now, if you sell your house after 5 years, then I believe you can take the remaining $1000 in a lump sum deduction.

Now the fine print...I am not an accountant, so maybe a tax person or accountant type will add their 2 cents worth. I am a refinancing queen, so have had lots of experience with the points thing.