I refinanced my mortgage, and I have points that I paid. I understand I will deduct those over the life of the loan.
My loan had a closing date of 12/28/2020 and disbursement date of 12/31/2020. HOWEVER, the mortgage for the new loan didn't provide funds on 12/31 to the settlement company - but instead provides them on 1/4/2021 (due to the holidays/weekend)
So the question is, can I deduct the points starting with my 2020 taxes (as that is when the closing date occurred and the disbursement date was supposed to occur) - or do I have to wait until 2021 taxes since the loan technically wasn't funded until then.
In your case, you have no points to deduct because you haven’t paid any yet. (The points are included in your monthly payment.) You amortize the points over the number of payments, such as 360 payments over the life of a 30 year mortgage. If you closed on 12/28/20, your first mortgage payment is probably due February 1, 2021. That means you have no points to deduct in 2020, and you will deduct 11 months worth of points in 2021, or 11/360 of the total (for a 30 year loan).
taxpayers who refinance the mortgage on their principal residence must amortize ant points paid over the life of the new loan unless the loan proceeds are used to substantially improve the main residence. points paid on a mortgage for a second residence are not deductible.
if amortizable, use the closing date of the loan for the start of the amortization period.
Thanks for the reply - but it really doesn't answer the question I asked
In your case, you have no points to deduct because you haven’t paid any yet. (The points are included in your monthly payment.) You amortize the points over the number of payments, such as 360 payments over the life of a 30 year mortgage. If you closed on 12/28/20, your first mortgage payment is probably due February 1, 2021. That means you have no points to deduct in 2020, and you will deduct 11 months worth of points in 2021, or 11/360 of the total (for a 30 year loan).
On the other hand, you may have pre-paid 3 or 4 days worth of interest at the closing (from 12/28-12/31) and this will be deductible on your 2020 tax return. You will find the amount on your closing statement, and you can deduct it even if you do not receive a 1098 for it.