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Old 02-02-2010, 02:08 PM
 
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I am doing my taxes (online) and there is a box for "Expenses for points paid on mortgage."

My home loan did have a point paid on it, but it was paid by the builder. Is this still something i can deduct? The tax software was not exlicity with who paid for it.

Thanks
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Old 02-02-2010, 08:32 PM
 
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In general, you can't take deductions for things not paid by you.

But, how did the builder pay it? Is it on the loan doc that you paid a certain amount for points and the builder lowered the price of the house by that amount? If so, you can deduct it because you did pay the point.
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Old 02-03-2010, 07:39 AM
 
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Quote:
Originally Posted by DowntownVentura View Post
In general, you can't take deductions for things not paid by you.

But, how did the builder pay it? Is it on the loan doc that you paid a certain amount for points and the builder lowered the price of the house by that amount? If so, you can deduct it because you did pay the point.
on the good faith estimate it had a column for "paid by builder" and "paid by borrower", but until i get my tax from the bank I'm not sure how it is documented.
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Old 02-04-2010, 06:38 AM
 
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It sounds like you bought a brand new home, which is why the builder would offer to pay points. If so, then yes, you CAN deduct the points.

From the IRS:

"Points paid by the seller may be deducted by the buyer provided the buyer subtracts the amount from the basis, or cost, of the residence. "
Tax Topics - Topic 504 Home Mortgage Points

What this means is that if you bought a $200,000 home, and the builder paid for 1 point, or $2000, you can deduct that $2000 on your taxes. However, when you sell the home, when considering the gain exemption for primary residences, you would use a purchase price of $198,000, not $200,000.

You may also want to refer to IRS publication 936, Home Mortgage Interest Deduction (Publication 936 (2009), Home Mortgage Interest Deduction), for more detail.
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