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Amortize points on the Schedule A

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📊 Step-by-Step Guide

Step 1: Enter points not reported on Form 1098

Use this when you need to enter points that are not shown on Form 1098.

Enter the amount of points not reported on Form 1098.

Step 2: Link to the Depreciation Worksheet (if amortizing)

Use this when you are amortizing points over the life of the loan.

If you are amortizing points over the life of the loan, link to a Depreciation Worksheet from this field.

On the Depreciation Worksheet, fill in the following:

• Description
• Date placed in service (date of loan)
• Cost or basis (amount paid for points)
• Method (select AMORTIZ)
• Recovery period (length of loan)

SureFire calculates the deductible amount and sends it to this field.

Step 3: Understand which points are generally deductible

Use this to determine whether the points you paid are deductible.

Points are shown on the taxpayer's settlement statement. Points paid only to borrow money are generally deductible over the life of the loan.

See IRS Publication 936 to figure the amount the taxpayer can deduct.

Points paid for other purposes, such as for a lenders services, are not deductible.

Step 4: Refinancing rules

Use this when the points relate to refinancing a mortgage.

Refinancing

Generally, taxpayers must deduct points paid to refinance a mortgage over the life of the loan. This is true even if the new mortgage is secured by the taxpayer's main home.

Step 5: If proceeds were used to improve the main home

Use this when part of the loan proceeds were used for home improvements.

If the taxpayer used part of the proceeds to improve his or her main home, you may be able to deduct the part of the points related to the improvement in the year paid. See Publication 936 for details.

Step 6: If the mortgage was paid off early

Use this when the taxpayer paid off the mortgage before the end of the loan term.

If the taxpayer paid off a mortgage early, deduct any remaining points in the year he or she paid off the mortgage.

Tags: federal,form