I received a CP28A that stated I claimed too large of a "Home Mortgage Interest Deduction on Schedule A of your 2024 Form 1040 tax return". After additional review, the error is mistakenly added both the interest from the Form 1098 and the points paid from the closing statement to line 8A instead of separating them with points claimed on line 8C. I need help figuring out how much of the points I can claim, see below for details:
My closing statement section A reflects borrower paid points of 5.391% of the mortgage amount (as percentage of loan amount) of $15,981.61 and seller paid of $9,425.90, totals $25,407.51.
Amount of cash I contributed to closing that is listed in section L was $5,000 earnest deposit and $19,000 wire transfer, totaling $24,000. Realtor credit of $3,799.40 is listed as an adjustment. Seller credit under paid on behalf of borrower at closing was $10,861.15. Total due from borrower at closing (section K) is $505,614.99 and total already paid by or on behalf of borrower at closing (section L) is $510,565.67, and resulted in cash to close to borrower of $4,950.68.
Am I able to claim the full $24,000 of money I directly contributed to closing towards the mortgage point interest deduction, or the full $25,407.51 of mortgage points paid given the realtor credit was an adjustment in section L? Does the amount of cash to close to borrower at the end have any impact on deductible amount?
