VA and FHA loan deductible question?
i have a question for my hw but i couldnt find it. please help if you know ! thanks so much
Are points paid by homebuyers on VA and FHA loans deductible in the year the house is purchased ?
Cite the Appropriate Revenue Precedure to support to your answer.
- Bostonian In MOLv 77 years agoBest Answer
Points for a purchase money mortgage are deductible in the year of the purchase. Of course you must have enough itemized deductions to make itemizing worthwhile. Unless you close fairly early in the year you probably won't have enough deductions to make itemizing worthwhile.
If you don't or can't deduct in the year of purchase, you can amortize the points over the life of the loan. Any unused amount remaining when the loan is retired can be deducted in the year that the loan is retired.Source(s): Schedule A instructions: http://www.irs.gov/pub/irs-pdf/i1040sca.pdf