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TaxTip about Points Paid by the Buyer
Posted at Tips from T-ReX by T-ReX Global
May. 9, 2008
Categorized in: TaxTips
Tagged with: points, real estate professionals, taxtips
Starred by: 1 Member
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.

To learn more about all the different ways to save money on real estate investments, visit our sites.

RealTaxTips.com

 Niman Singh
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