Matthew purchases a new principal residence in 2014 and pays points of $2,000 to obtain a mortgage loan. What is the proper tax treatment for the points paid?
A) The points are a nondeductible personal expense.
B) The points must be amortized over the life of the loan.
C) The points are fully deductible in 2014.
D) The points must be capitalized into the cost of the residence.
E) The points must be amortized over 5 years.
Correct Answer:
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