Can I Deduct Seller-Paid Mortgage Points?
August 28th, 2008 By Peter G. Miller
If a seller pays points, the points are deductible in the year paid as an expense of selling.
If a buyer pays points, the points paid by the purchaser are deductible by the buyer in the year paid.
If a seller pays points to assist the purchaser, the BUYER may deduct the value of the points paid in the year they were paid. If the buyer deducts points paid by the seller, the buyer must reduce the sales basis of the property (increase the amount of profit) when the home is sold.
The above rules apply to owner-occupied prime residences only.
For specific information, please speak with a tax attorney, CPA, or enrolled agent.
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