I'd like to deduct the points in the year I paid for them. Turbo Tax seems to force me to amortize over 30 years. Yet, the TurboTax NOTE says you can deduct in the current year. Help!
WHat criteria are you referring to?
Generally, on your first mortgage you have to amortize the points over the term of the loan.
You can deduct points for your main home, if they're discount points. Discount points lower your mortgage rate by a certain percentage. When you buy discount points, you're paying interest up front in exchange for a lower interest rate on your mortgage. Because discount points are prepaid interest, they're deductible as mortgage interest on a main home or second property that's not being rented out.
The other type of points is the Origination points. Those are charged by lenders to cover loan processing costs. Sometimes they'll also include fees for appraisals, inspections, title, attorneys, notaries, and real estate taxes. Origination points aren't deductible on non-rental property.
If you don't know which category your points belong to, ask your lender for clarification.
Thanks much! I figured out my problem. I clicked a wrong "bubble" in the application. I'm all set to take the "discount points" as a deduction in 2023.
Not going through home acquisition very often it's a learning curve. Would be nice of Turbo Tax provided a better explanation, not just can you but how do you use the tool to get it. I found some of the questions somewhat confusing. Alas, I'm all set. Thanks again for responding. Have a great day!!!