Wayne and Maria purchase a home on April 1 of the current year. In order to obtain a thirty- year mortgage, they are required to pay $7,200 in points at closing. Charging points is a customary business practice in the area. In addition, they pay $4,400 of interest during the year. What is their current year deduction related to their home?

Question

Quizplus · Accepted Answer

Points paid on a mortgage for a principal residence are generally deductible in the year paid if they are customary in the area. Therefore, Wayne and Maria can deduct both the $7,200 in points and the $4,400 in interest, totaling $11,600.

Wayne and Maria Purchase a Home on April 1 of the Current