Today you will hear about points and PMI (kinda catchy, isn’t it?) Points are loan origination fees that are a percentage of your loan and can be fully deductible on the purchase of your primary residence or a second vacation home in the year of purchase. Certain requirements have to be met. Points on a refinance are deductible over the life of the new loan. Here is an article by The Mortgage Professor about points:
http://www.mtgprofessor.com/A%20-%20Points/are_points_deductible.htm
PMI stands for Private Mortgage Insurance and is a requirement on a loan if the taxpayer put less than 20% down on a purchase of a house or has less than 20% equity in a house in a refinance. PMI can be deductible but there are limitations of income. Here is an article by Kay Bell at Bankrate.com:
http://www.bankrate.com/finance/taxes/deducting-private-mortgage-insurance.aspx
As usual, if you have any questions, call me at 818-317-6035 or email me at bstonercpa@sbcglobal.net and I will try to answer them.
The next three blogs will talk about investment, business and rental interest.
You can count on us to count for you!