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Hi, I believe I missed out on deducting the origination fees (points) when my husband and I opened a construction loan in 2016. Can I deduct that amount on my 2017 taxes?

Forum|Forum|7 years ago
June 6, 2019
2 replies
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Best answer by Opus 17

Two options.

Either, go back and amend the 2016 tax return to claim the entire amount.

Or, amortize the points over the life of the loan (i.e., for a 30 year mortgage you would deduct 12/360th of the points this year if you made 12 loan payments this year) and then 12/360ths every year from now on until you sell, pay off the loan or refinance.

Also, you can only deduct the amount as a lump sum if the amount of cash you brought to the table (down payment and closing costs) was at least as much as the amount of the points. If you opened the construction loan without a cash down payment, you can only use the amortization method and not the lump sum method.

Answer

Level 15

Two options.

Either, go back and amend the 2016 tax return to claim the entire amount.

Or, amortize the points over the life of the loan (i.e., for a 30 year mortgage you would deduct 12/360th of the points this year if you made 12 loan payments this year) and then 12/360ths every year from now on until you sell, pay off the loan or refinance.

Also, you can only deduct the amount as a lump sum if the amount of cash you brought to the table (down payment and closing costs) was at least as much as the amount of the points. If you opened the construction loan without a cash down payment, you can only use the amortization method and not the lump sum method.

Alumni - Expert

Alumni - Expert

Points incurred in 2016 have to be reported on that tax year (not 2017). But you can amend that tax year and add the points

https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed?...

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