Can I deduct points and origination fee on 2012 refinance home loan?

Paid $795 Origination fee and $618 (0.25 point) totaling $1,413 on a refinance of home loan.  Can this be deducted or is this deduction only for original purchase of home, home equity loans, or for improvements on home ?
  • The origination fee and points were paid in full at closing of refinance and not spread out over life of loan.
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Generally, you can only deduct qualified points paid on a mortgage over the term of the loan (as stated by pdhileyjr above), unless the property is rental property.


The fees that can be deducted in a mortgage refinance generally depend on whether the property is your principal or rental residence, how the loan proceeds were used, and whether you paid qualified points or not.

 

Qualifying points are considered pre-paid interest.  This interest is paid or treated as paid to the lender by a borrower to obtain a mortgage loan. Points can also be called loan origination fees, maximum loan charges, discount points, or loan discount.

 

Here is a good article titled  What Can I Deduct in a Mortgage Refinance? that may be helpful too:

http://turbotax.intuit.com/support/iq/Other-Deductions-and-Credits/What-Can-I-Deduct-In-a-Mortgage-R...





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    ALL FEES PAID AT CLOSING
    • To clarify, can I deduct "all fees paid at closing" in my 2012 return, the year of refinance?  Or does this have to be amortized over life of loan based on months?  What is the math for amoritizing if so, does that mean (15 yrs x 12 mos.) dividied into all fees paid at closing?  thanks.
    • pdhileyjr - For a personal residence, you do not deduct ALL fees paid at closing.  If you paid points or origination fees when you "refinanced" your home (they are paid in full at closing) then you must amortize them over the term of the loan.  

      When you click the box in TurboTax that asks if your are Spreading the Points over the term of the loan, the software will ask the date, the term, and the amount and do the math for you.

      Other amounts that may be deducted in your closing costs are any property taxes that were owed and paid at closing.  Just make sure it is not the property taxes that are put into the reserves account.
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