Bob sold a personal residence to Fred and paid points of $2,000 on the loan to help Fred finance the purchase.Bob can deduct the points as interest.

Question

Quizplus · Accepted Answer

Points paid by the seller, such as Bob, are not deductible as interest by the seller. They are considered part of the selling expenses and can only be deducted by the buyer, Fred, as part of the cost of acquiring the home.

Bob Sold a Personal Residence to Fred and Paid Points