mortgage point deduction

[dsb63]

Turbo tax is making me deduct my mortgage points over 30 years, why? Is there a flaw in the system as i have checked the box to deduct this year in full?

[Cynthiad66]

You can deduct the points in full in the year you pay them, if you meet all the following requirements: Your main home secures your loan (your main home is the one you live in most of the time). Paying points is an established business practice in the area where the loan was made.

For more information click on this link:  Home Mortgage Interest/points

[dsb63]

Thank you, yes i meet all the requirements. My issue is the turbo tax software is auto calculating a 30 year pro ration on the points. Any thoughts on how to change to get it to apply all points to the current year of the purchase?

[MarilynG1]

On a second home, points can only be deducted over the life of the loan. The same is true for refinances, except in cases where you used a portion of your refinance proceeds to improve your home. In that case, the points related to the home-improvement portion of the loan can be deducted in the year you paid them.

If you refinanced with the same lender, any undeducted points left over from the first mortgage will be deducted over the life of your new loan. But if you refinanced with a new lender, any leftover undeducted points can be deducted in the year of the refinance.

When you get to the Did you have any home loans? screen in the Deductions Credits section, we'll walk you step-by-step through your mortgage, including points and refinances.

Click this link for more detailed info on Mortgage Points. 

[Opus 17]

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@dsb63 wrote:

Thank you, yes i meet all the requirements. My issue is the turbo tax software is auto calculating a 30 year pro ration on the points. Any thoughts on how to change to get it to apply all points to the current year of the purchase?

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Points must always be spread out on a refinance.  Points must always be spread out on a second home.

A qualification the previous answers did not mention is that you must bring at least as much cash to the closing as the points you paid.  (If you paid points, but they were rolled into the mortgage and you did a no closing cost mortgage, you must spread out the points.)

You may need to delete the 1098 and start over entering the mortgage, pay attention to all the qualification questions. 

[dsb63]

I deleted and restarted section and the same is coming up. Turbo tax saying the points will be deducted over the life of the loan. I have ensured all info imputed was correct. This is a first time mortgage, not refinance and i should be able to deduct all points. Is anyone else having this issue with the software, i'm using premier turbo tax on mac?

[DanAlger]

I am running into the same issue.  The initial lender resold the mortgage 2 weeks after closing.  The initial purchase and the change in lenders occurred in 2022.  But TurboTax is determined to amortize the points over the life of the mortgage.  I have gone into the supporting worksheets and they show the proper numbers and elections.  Quite frustrating.

[Opus 17]

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@DanAlger wrote:

I am running into the same issue.  The initial lender resold the mortgage 2 weeks after closing.  The initial purchase and the change in lenders occurred in 2022.  But TurboTax is determined to amortize the points over the life of the mortgage.  I have gone into the supporting worksheets and they show the proper numbers and elections.  Quite frustrating.

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If the lender transfers servicing of the loan, that is not a refinance, don't treat it as such.

As to why the program is not treating original purchase points as fully deductible, we can't see your file.  If you call customer support, they can do a screen share and look at the program internal worksheets.  Or maybe @MarilynG1  or @Cynthiad66  will be able to help further.