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the home, you must have paid the points with funds other

Line 13, Qualified Mortgage Insurance Premiums—Premiums

than those obtained from the lender.

that you pay or accrue for “qualified mortgage insurance”

during 2011 in connection with home acquisition debt on your

Funds provided by you include down payments, escrow

qualified home are deductible as home mortgage insurance

deposits, earnest money applied at closing, and other

premiums. Qualified mortgage insurance is mortgage insurance

amounts actually paid at closing. They do not include

provided by the Veterans Administration, the Federal Housing

amounts you borrowed as part of the overall transaction.

Administration, or the Rural Housing Administration, and

private mortgage insurance. Mortgage insurance premiums

Seller-Paid Points—If you are the buyer, you may be able to

you paid or accrued on any mortgage insurance contract issued

deduct points the seller paid in 2011. You can do this if the

before January 1, 2007, are not deductible.

loan was used to buy your main home and the points meet

item 2 above. You must reduce your basis in the home by

Limit on amount you can deduct. You cannot deduct your

those points, even if you do not deduct them.

mortgage insurance premiums if the amount on Form 740-NP ,

line 8, is more than $109,000 ($54,500 if married filing separate

The seller cannot deduct these points as interest. However,

returns). If the amount on Form 740-NP , line 8, is more than

they are a selling expense that reduces the amount realized

$100,000 ($50,000 if married filing separate returns), your

by the seller. See federal Publication 523 for information on

deduction is limited and you must use the worksheet below

selling your home.

to figure your deduction.

This generally does not apply to points paid to refinance your

mortgage. Federal rules apply. See federal Publication 936

for more information.

Qualified Mortgage Insurance Premiums Deduction Worksheet

See the instructions for Line 13 above to see if you must use this worksheet to figure your deduction.

1. Enter the total premiums you paid in 2011 for qualified mortgage insurance for a

contract entered into on or after January 1, 2007 ..........................................................

1. __________________

2. Enter the amount from Form 740-NP , page 1, Line 8 .......................................................

2. _________________

3. Enter $100,000 ($50,000 if married filing separate returns) ............................................

3. _________________

4. Is the amount on Line 2 more than the amount on Line 3?

 No. Your deduction is not limited. Enter the amount from Line 1 above

on Schedule A, Line 13.

 Yes. Subtract Line 3 from Line 2. If the result is not a multiple of $1,000

($500 if married filing separate returns), increase it to the next

multiple of $1,000 ($500 if married filing separate returns). For

example, increase $425 to $1,000, increase $2,025 to $3,000;

or if married filing separate returns, increase $425 to $500,

increase $2,025 to $2,500, etc. ............................................................................

4. __________________

5. Divide Line 4 by $10,000 ($5,000 if married filing separate returns).

Enter the result as a decimal. If the result is 1.0 or more, enter 1.0 ................................

5. __________________

6. Multiply Line 1 by Line 5 ....................................................................................................

6.___________________

7. Qualified mortgage insurance premiums deduction. Subtract Line 6 from Line 1.

Enter the result here and on Schedule A, Line 13 ............................................................

7. ___________________

Instructions For Form 740-Np - Nonresident Or Part-Year Resident Income Tax Return - 2011 Page 14

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