Points paid by the owner of a personal residence to refinance an existing mortgage must be capitalized and amortized over the life of the new mortgage.

Question

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Points paid on a mortgage refinancing must be capitalized and amortized over the life of the new mortgage under IRC Section 263A. This applies to points paid by the homeowner on their primary residence for refinancing an existing mortgage.

Points Paid by the Owner of a Personal Residence to Refinance