Form 740-Np - Kentucky Income Tax Return Nonresident Or Part-Year Resident - 2012 Page 48
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60apply: (1) the loan was used to buy, build or improve your
This generally does not apply to points paid to refinance your
main home, and was secured by that home, (2) the points
mortgage. Federal rules apply. See federal Publication 936
did not exceed the points usually charged in the area where
for more information.
the loan was made, and were figured as a percentage of the
loan amount, and (3) if the loan was used to buy or build the
home, you must have provided funds (see below) at least
Line 13, Qualified Mortgage Insurance Premiums—Premiums
equal to the points charged. If the loan was used to improve
that you pay or accrue for “qualified mortgage insurance”
the home, you must have paid the points with funds other
during 2012 in connection with home acquisition debt on your
than those obtained from the lender.
qualified home are deductible as home mortgage insurance
premiums. Qualified mortgage insurance is mortgage insurance
Funds provided by you include down payments, escrow
provided by the Veterans Administration, the Federal Housing
deposits, earnest money applied at closing, and other
Administration, or the Rural Housing Administration, and
amounts actually paid at closing. They do not include
private mortgage insurance. Mortgage insurance premiums
amounts you borrowed as part of the overall transaction.
you paid or accrued on any mortgage insurance contract issued
before January 1, 2007, are not deductible.
Seller-Paid Points—If you are the buyer, you may be able to
deduct points the seller paid in 2012. You can do this if the
loan was used to buy your main home and the points meet
Limit on amount you can deduct. You cannot deduct your
item 2 above. You must reduce your basis in the home by
mortgage insurance premiums if the amount on Form 740-NP,
those points, even if you do not deduct them.
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.
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 2012 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. __________________
14
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