Mark from Baltimore, MD asks, “Can I deduct the points I pay in refinancing?”
Yes, but not in the same way you deducted the points paid when you purchased. Discount points paid in refinancing must be amortized over the years of the loan for the purpose of tax deductions. For example, $2,000 paid to refinance a 20 year loan would provide an annual deduction of $100.
I would recommend that a borrower consult with a tax professional if he/she is unsure about the deductions he/she may get.
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