Publication 936 - Home Mortgage Interest Deduction - 2011 Page 6
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16Figure B. 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
Were the points paid in place of amounts
Yes
that ordinarily are separately stated on the
settlement sheet?
No
Were the funds you provided (other than
those you borrowed from your lender or
No
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
Were the points computed as a
No
percentage of the principal amount of the
mortgage?
Yes
No
Is the amount paid clearly shown as
points on the settlement statement?
Yes
You can fully deduct the points this year
You cannot fully deduct the points this
on Schedule A (Form 1040).
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 936 (2011)
Page 6
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