Jack sold a personal residence to Steven and paid points of $3,500 on the loan to help Steven finance the purchase.
Jack can deduct the points as interest.

Question

Quizplus · Accepted Answer

Points paid by a seller on a loan for the purchase of a personal residence are considered a selling expense and cannot be deducted as interest by the seller. They may, however, reduce the seller's capital gain on the sale.

Jack Sold a Personal Residence to Steven and Paid Points