Property Management Software

Blog by Niman Singh

Fremont, California

T-ReX Property Management Software for real estate investors to save them TIME and MONEY

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TaxTip about Points Paid by the Buyer

Posted at Property Management Software by Niman Singh

May. 9, 2008

Categorized in: Property Management Software

Tagged with: points, real estate professionals, taxtips

Starred by: 2 Members

Many people get confused about how to treat points, so I hope this post is helpful. In this blog, I am focusing particularly on what to do when the Points are Paid by the Buyer. For Points Pre-Paid by the Seller, read my previous blog...

A point is interest that has been pre-paid in an effort to "buy down" the fixed interest imposed on a mortgage.

In a property SALE (not refinance), if Points are Paid by the Buyer:

If you are the BUYER:
For Personal Property	For Rental Property
Deduct all points as mortgage interest on Schedule A	Deduct points over the life of the loan on Schedule E

Keep in mind, this post is regarding points paid on the sale of property. Points paid during a refinance are treated differently. As always, consult with a tax advisor to be on the safe side.

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