Publication 530 - Tax Information For Homeowners - 2008 Page 5
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16Figure A. Are My Points Fully Deductible This Year?
Start Here:
No
Is the loan secured by your main home?
Yes
No
Is the payment of points an established business practice in
your area?
Yes
Yes
Were the points paid more than the amount generally charged
in your area?
No
No
Do you use the cash method of accounting?
Yes
Yes
Were the points paid in place of amounts that ordinarily are
separately stated on the settlement sheet?
No
Were the funds you provided (other than those you borrowed
No
from your lender or mortgage broker), plus any points the
seller paid, at least as much as the points charged?*
Yes
Yes
Did you take out the loan to improve your main home?
No
No
Did you take out the loan to buy or build your main home?
Yes
No
Were the points computed as a percentage of the principal
amount of the mortgage?
Yes
No
Is the amount paid clearly shown as points on the settlement
statement?
Yes
You cannot fully deduct the points this
You can fully deduct the points this year.
year. See the discussion on Points.
* The funds you provided do not have to have been applied to the points. They can include a down payment, an escrow deposit, earnest money, and other funds
you paid at or before closing for any purpose.
Publication 530 (2008)
Page 5
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