I'm deducting points on a refinanced loan. Refinance was with same lender so should be amortized. Turbotax is deducting all the points in 2021. How can this be done?

[buckwild_1977]

According to Publication 936 points deducted for a loan refinanced with the same lender should be amortized but Turbotax does not ask this question and deducts all the points after checking the "I refinanced or paid off this loan in 2021." I'm unsure how to have this calculated properly in TurboTax.

[metrangia]

I don't mean to hijack your thread, but the way TurboTax determines points deductions is buggy.  I have the opposite problem.  We sold our house and bought a new one on the same day.  On the new mortgage, we paid $5,000 in points.  Instead of allowing me to deduct the full $5,000 for tax year 2021, TurboTax is amortizing the amount and allowing me to deduct only $18.  Even that number is incorrect, because $5,000 amortized over 30 years should be $167 annually.  This sure looks like a bug to me.

IRS Topic 504 (https://www.irs.gov/taxtopics/tc504) explains the requirements that must be met to deduct the entire amount in one year.  We meet the requirements, but TT isn't even asking us the necessary questions to determine the possibilities.

[PatriciaV]

Please review your answers to the questions under Form 1098 on the page "Tell us about any points paid to [name on 1098]".

Be sure you checked both Box 1 (new loan) and Box 2 (bought main home). Those two questions will trigger the full deduction of points paid in the year you purchased the home.