Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Path: utzoo!linus!philabs!seismo!hao!kpno!ut-sally!utastro!bill
From: bill@utastro.UUCP
Newsgroups: net.taxes
Subject: Re: re:loan points
Message-ID: <553@utastro.UUCP>
Date: Sat, 3-Sep-83 14:14:15 EDT
Article-I.D.: utastro.553
Posted: Sat Sep  3 14:14:15 1983
Date-Received: Sun, 4-Sep-83 04:41:08 EDT
References: aluxe.49
Lines: 28


>>>>>
Loan Points are not tax deductible at the time of the sale.  They may be
deducted when you figure the capital gain on your house when
you sell it.
                                     aluxe!david1
<<<<<

My Lasker's tax guide (1982) says:

In general, "points" which qualify as interest are not
deductible in the year paid.  They are treated as prepaid
interest and must be deducted over the period of the loan.
There is one exception: "Points" charged on a loan to buy
or improve your principle residence are deductible in the
year paid, provided: (1) The loan is secured by your
principal residence; (2) the charging of points is an
established business practice in the geographic area
in which the loan is made; and (3) the "points" charged do
not exceed the "points" generally charged in the area.

I can find no support for the concept of "capitalizing" the
points as suggested in aluxe!david1 's article.

	Bill Jefferys  8-%
	Astronomy Dept, University of Texas, Austin TX 78712   (Snail)
	ihnp4!kpno!utastro!bill   (uucp)
	utastro!bill@utexas-11   (ARPA)