Publication 936, states that private mortgage insurance premiums must be amortized over an 84-month period. It means that even though you may have prepaid a larger amount when closing, you can only deduct the portion that is allocable for the months you paid in 2016. Ex: Prepaid $6000 in private mortgage premium when closing on my home on 7/1/2016. $6000/84 = $71.42. $71.42 is paid to the mortgage company with the mortgage payment for the rest of the year. You can deduct $71.42 X 6 months paid = $428.52 for 2016.The rest of the prepaid amount is deducted in future tax years.
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