On July 1 of the current year,Marcia purchases a new home and borrows $320,000.Marcia is required to pay two points on the loan.The loan is secured by the residence and the charging of points is an established business practice in the area.The term of the loan is 20 years,beginning on July 1 of the current year.How much,if any,of the points may Marcia deduct in the current year?

Question

Quizplus · Accepted Answer

Marcia can deduct the full amount of points paid ($6,400) in the year of purchase because the loan is secured by her primary residence, and paying points is an established business practice in the area.

On July 1 of the Current Year,Marcia Purchases a New