Points on primary home

[helenjenkins290]

Received 1098 for loan which has points in box 6.  The input for 1098 doesn't include an option to enter box 6. Going through the loan questions it asks about the points, but then it amortizes it.  This loan meets all the requirements for writing off the points in the year incurred.  Is this a glitch or did we enter it wrong.

[MayaD]

You can deduct the points in full in the year you pay them, if you meet all the following requirements:

1. Your main home secures your loan (your main home is the one you live in most of the time).
2. Paying points is an established business practice in the area where the loan was made.
3. The points paid weren't more than the amount generally charged in that area.
4. You use the cash method of accounting. This means you report income in the year you receive it and deduct expenses in the year you pay them.
5. The points paid weren't for items that are usually listed separately on the settlement sheet such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes.
6. The funds you provided at or before closing, including any points the seller paid, were at least as much as the points charged. You can't have borrowed the funds from your lender or mortgage broker in order to pay the points.
7. You use your loan to buy or build your main home.
8. The points were computed as a percentage of the principal amount of the mortgage, and
9. The amount shows clearly as points on your settlement statement.

For more information please check Home Mortgage Points

[helenjenkins290]

thanks, but this didn't answer my question.  The loan meets all these requirements, however, the program is causing it to be amortized. How should it be input to get the full deduction

[DawnC · Accepted solution]

Go back though the 1098 questions again and make sure you answered everything correctly in order to deduct the points this year.   Check the origination and acquisition dates.  Make sure you indicated that the property was secured.   

To deduct 100% of your 2021 points on this tax return, you must check the box "This is a new loan on which I paid points (origination fees) in 2021" and the box "I bought or improved my main home with this loan in 2021."