Debra and Ken refinance their personal residence on July 1, 2017. They borrow $96,000 over a 20-year period and paid points of $1,920. For 2017, what amount of the points is deductible?

Question

Quizplus · Accepted Answer

The points paid for refinancing of a personal residence are not fully deductible in the year of payment. Instead, they must be spread over the life of the loan. In this case, since the loan is for 20 years, the deductible amount of points for 2017 would be $1,920/240 (20 years x 12 months) = $8. Therefore, the correct answer is B) $48.

Debra and Ken Refinance Their Personal Residence on July 1