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kbeeleigh
New Member

I have an FHA loan so my mortgage insurance is financed. Do I input the entire Upfront mortgage insurance premium (that is financed) in the mortgage ins premium box?

 
1 Reply
PaulaM
Employee Tax Expert

I have an FHA loan so my mortgage insurance is financed. Do I input the entire Upfront mortgage insurance premium (that is financed) in the mortgage ins premium box?

No. 

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: I prepaid $6000 in private mortgage premium when I closed my home on 7/1/2016. $6000/84 = $71.42. $71.42 is paid to my mortgage company with my mortgage payment for the rest of the year. I can deduct $71.42 X 6 months paid = $428.52 for 2016.

The rest of the prepaid amount is deducted in future tax years.

https://www.irs.gov/pub/irs-pdf/p936.pdf

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