IS THE ORIGINATION "POINT" DEDUCTABLE?? YES! The IRS says so!

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IS THE ORIGINATION "POINT" DEDUCTABLE?? YES! The IRS says so!

IS THAT ORIGINATION POINT ON YOUR HUD-1 DEDUCTIBLE? READ THE IRS WEB SITE AND THE ANSWER IS PROBABLY YES, YES, YES.

YOU'D BE SURPRISED HOW EASY TO READ THE IRS WEB PAGE IS.

Agents and loan officers sometimes advise buyers and sellers about the deductablity of the certain items on the HUD-1.

For instance, home buyers often ask their real estate agent or loan officer questions about detectability of closing costs. Sellers ask too, but not as often. Buyers often depend on the detectability of mortgage interest to bridge the gap between renting and buying. Clearly, the higher the income, the more valuable the tax deduction is to a home buyer. Lenn

DON'T GIVE TAX ADVICE. Send that buyer to the IRS web page and let them read the section on HOME MORTGAGE INTEREST AND POINTS. However, many agents and loan officers make the mistake of telling buyers that the discount point is deductible but that the "origination fee" is NOT. WRONG!!

THE ORIGINATION FEE or point IS DEDICTABLE. That's not Lenn's advice. That's from the IRS.

Read the IRS Instructions for Points.

http://www.irs.gov/publications/p936/ar02.html#en_US_publink1000229936

WARNING TO CONSUMERS AND ALL. THIS MATTER IS COMPLICATED AND I RECOMMEND READING THE IRS WEB SITE. The Devil is in the details.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Points

The term "points" is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points (emphasis added).

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

ATTENTION HOME BUYERS! Don't ask your real estate agents or loan officer for tax advice. Consult your accountant or the IRS web page. It's in plain English and very helpful.

Let's get this matter cleared up once and for all. A POINT IS A POINT IS A POINT. A point is ONE PERCENT of the loan amount. Call it a butterfly or a shark. An Origination Fee is a POINT.

Save your HUD-1. The points, all of them, even if paid by the seller are deductable for you. You can find that on the IRS site too.

ARE MORTGAGE LOAN ORIGINATION FEES DEDUCTIBLE?? YES, YES, YES.

NOTE: See John Cannata - LegacyTexas Mortgage Sr Loan Officer's comment below. It goes into more detail that I wanted to do but he is correct, which is also clear on the IRS web site.

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.

_______________________________________________________________________________________________________

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Posted by Lenn Harley, Real Estate Broker, Virginia & Maryland on 07/25/2010 06:33 PM

Comments (86)

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86 Comments on IS THE ORIGINATION "POINT" DEDUCTABLE?? YES! The IRS says so!

JUL

2010

Lenn, Great post. I get this question a lot since I am in the mortgage business and I always tell them I am not tax expert but they can refer to the IRS website for the information. It's very easy to navigate to the write off section and is pretty easy to read compared to some IRS mumble jumble stuff. Thanks for the link...

Thanks for the link Lenn. As is typical of the IRS it's important to read in its entirety.

Lenn,

In years past we've found tax preparers to actually request the settlement statement to insure all that is deductible is taken.

The ready access of online tax information is great. This information is at our fingertips and RE agents don't have to "risk" giving tax advice without a license.

Steve

Thank you for the reminder on this wonderful bonus that we can remind our buyers about!

Lenn, I agree never give Tax or Legal advice, that can back fire so fast. I always have attorneys and CPA's to referr the person asking the questions. Avoids a great many landmines as well as court:))

That's what I do.... here's a link to IRS :)

so after I refer them to the IRS page, just between you and me is it deductible?

cheryl(just kidding)willis

Lenn

You are right on target we should never give tax advice.

Good luck and success.

Lou Ludwig

JUL

2010

Lou. This post was prompted by another post where an agent gave a lot of advice and some of it WRONG! They clearly wrote that the origination fee was NOt DEDUCTIBLE. I sent the IRS info to them but they prefer to leave WRONG info on their blog. Hence. . . . this.

Cheryl. YES, YES, YES. I don't mind stating a fact if I have an authority to back it up.

Sally. Smart practice.

Endra. Indeed. Two mine fields are tax and legal advice that agents appear to give often. If they don't have an authority to back it up, like the IRS rule, or the Copyright law, etc., suggest that they contact an expert. If they want real estate advice, I'm that expert.

Maya. My pleasure.

Steve. You bet. Many buyers don't understand decuctions from the HUD-1. There aren't many but they are valuable.

Denise. Read, read, read.

Stephanie. You bet. I have referred folks to this page for ages.

Lenn - I try not to give advice on taxes, legal, finances, etc. Always refer. I do bring out "points to ponder" such as possible tax implications or the different ways to take title. But, I always refer to the licensed provider, or, like you, to a link on the web. Thanks for adding this link to my arsenal.

Hello Lenn:

Thanks for the post and the URL to the tax man. Pointing people in the right direction and helping them understand what to look for, without giving them legal or accounting advice is the mark of true professionals.

Brian Rugg

Rugg Realty Sun City Tx

Lenn,. I have to admit, I almost had a heart attack when I quickly read the title of your post. My eyes skimmed over origination fees and I just mortgage loan fees followed by yes, yes,yes.. lol I was going to say, not all lender fees are deductable, unless you have a shady accountant.. lol But in any case, to many, even loan officers, fail to realize that origination fees are merely points. It's just another term in the HUD handbook that is misleading. And some loan officers in the past sold it that way, because in the handbook it states : A fee in providing the services of handling the processing of a loan. In my opinion, that was always a sad definition. But yes, in layman's terms, it's a point. Hence why I don't charge lender fees and just roll them into the points. Thuis way they get a full write-off. If another lender and I had the same exact costs between lender fees and points, yet they had $1,000 in lender fees and mine were zero, I would still be cheaper because of the write-off. Good post to open some eyes, especially when it comes to some loan officers that don't know the difference.

jeff belonger

Thanks Re-Bloggers.

Re-blogged by 4 agents

Mike. It's a good authoritative and easy to follow site.

Brian. Indeed. What I can't figure is why another poster wrote that the origination fee is NOT deductible when it is and when I sent him to the right info on the IRS web site, he refused to correct his post. That's the only reason I posted this.

Jeff. Detectability of fees is a very important factor when shopping loans. The APR may be the same, but when the points are factored in, there can be great savings for detectability.

WHATS YOUR POINT... ;>)

Great advice Lenn. We should not give tax advice! Buyers should be able to navigate the website!

Just to clarify... the IRS does that that a 'point' can be called many things... it further reads that ONLY when this point is used to deduct the rate. In other words the POINT is used to lower the rate and deduct the overall interest in the loan. If that ORIGINATION Fee is merely to pay the company (no matter what they call it) then it would not be tax deductable.

To clarify further... I NEVER tell my clients one way or another because I'd prefer they work with a Tax Expert, which I am not. I do my job and they do theirs. But someone reading this post may really feel that they can write off the origination fee... that is not always the case and they should ALWAYS consult an expert. Another thing they should do is clarify with the Loan Originator if the point is to pay the rate down or is it part of the lender charges.

Great post. This is a good "in" with some strategic partners. Are you mining for leads from CPA's, financial consultants, plumbers, etc? This is a great way to introduce your client to your accountant. You never know when they will reciprocate. We have to be careful giving any type of advice outside of our realm of expertise. So, I give them my CPA's number or tell them to call their tax professional so they can call and get the information themselves. We also have to remember that the tax code is changing all the time, and we don't want to give outdated information.

Also, a good idea at the end of the year is to get all the HUD-1's from your settlements and send them to the respective clients in your database that closed that year. Most people misplace their HUD's and it is a nice reminder for them to take their settlement statement to their CPA at tax time to make sure they take advantage of all the deductions. I even refer my CPA if they don't currently have one. You can also meet with your accountant and brainstorm the body of the letter to come off as even more of an expert. The point is you are touching base with a great nugget of information that nobody provides their clients. They are very grateful and you will look like an expert on top of their game that looks out for their client's best interests. Then you can follow up on the letter and respectfullly ask for referrals.

Lenn,

I have to admit that the title is very misleading and Jeff Belonger hits the key "point", sorry for the pun.

The fact is that not all Lender Origination Fees are Deductible! They have to set up as POINTS or they fail the IRS test. Many originators charge a flat fee and that fails the test! The bottom line is that if the orgination fee is not set up as points, declared as such, and amounts to a fixed percentage of the loan amount, then it cannot be deducted.

Additionally, points used to cover other HUD-1 items normally listed seperately are not deductible as well. That was misinformation many mortgage originators used in the past, and I suspect some still do. The IRS spreadsheet is very clear on this fact.

Anyhow, just wanted to mention the fact that origination fees are not always deductible!

Yes...but...

They may have to be capitalized over a number of years.

Great Blog...Keep up the good work!, Tom

LARRY MENNETTI. The point is there was a post on ActiveRain yesterday that stated that origination fees were NOT deductible. I'M CORRECTING THAT BAD ADVICE by linking to the FACTS on the IRS web site.

What's your point in asking???

len,

in your article you said a point is a point is a point.....I was poking fun when I said what's your point...since it was used so much, that is why the smiley face and the wink....at the end.

John C. I've clarified and added a note to read your comment. Thanks.

Robert. I've reworked the title based on your comment. Thanks.

Tom. The IRS web site is clear on refi points.

Lenn, it's good to know where to send our clients to get the goods from the horses mouth - not ours.

Larry. My apology. I must have let my paranoid self make that response. Thanks. for the chuckle. I missed it.

Patricia. Indeed and folks sometimes just can't find an authority. When it's taxes, there is only one authority.

Thank you Lenn. Glad I could add some value. I completely understand you wanting to shed some light.

Len,

You are completely forgiven....It is just my warped sense of humor shining thru...

Taxes are so complicated! I always advise buyers and sellers to consult with their tax preparer before entering in to a transaction. Finding out after the fact that you have a big tax liability is NO FUN.

John. My pleasure.

Larry. My mind is working in slow motion today.

Mary. Good idea.

Even better, the point is still deductible even if the seller pays it.

See, even in this economy in this market there are some great places to point people back to celebrate some things!

Michael. Indeed. I just didn't want to go into too much detail.

Lenn - Thanks for the link. I usually let the lender go through this information with the buyer.

Lenn - I did get your email about this but as you can see I did not write this article and clearly state that at the end of the article... Point taken... Thanks for keeping the ever watchful eye out for these points.....

I learned during the whole first time home buyers credit time that I wasn't about to give advice about taxes and credits. I advised my clients to contact a tax specialist to be assured that they would get the tax credit based on their specific situation. And I have a degree in Accounting. If you don't do it as your primary job, it's best to have them ask someone who does.

Christianne. Many first time home buyers are not familiar with deductions.

Nicole. Indeed. The IRS site was the best place for info about that tax credit too.

I reblogged it so I can find it and just refer people to it when they ask.

Lisa and Robert. The problem with reprinting a RealtyTimes article is that, if that writer made a mistake, you're reprinting the mistake. Folks might not read that far down.

I real a LOT of ActiveRain posts every day. When I read yours it looked very interesting and I was going to re-blog it. Then I saw that mistake about origination fees and .. . . . well, you know the rest.

Gene. Good idea. Thanks for the Re-Blog.

Lenn - Then that would be the readers problem no? It's right there in print and we're not hiding it from anyone...... Just sayin....

Lenn,

I'm not sure I'd ever use the word IRS and "easy" in the same sentence! LOL! This is from a person who has her taxes done under duress EVERY YEAR!!!!

A point is a point is a point. Good point!

Kathy. Welcome to the club. Actually, we might as well get used to it. It appears that all of the enforcement for new legislation will be enforced by the IRS.

Jerry. I got it.

Lenn, I price out loans exactly the way Jeff does. It does make a difference which line the figures are on! Great information here!

Thanks Deborah. I can see that there could be some confution about including lender fees like underwriting review, etc., in the origination fee. However, the IRS covers that. Folks need to read the IRS publication.

JUL

2010

Lenn, Great advice as always from you. Thanks for taking the time to do it. I am going to re-blog so this post can get to as many people as possible.

Yep, thanks for the link and the reminder to always advise clients to talk to a tax professional or go to the IRS authoritative website for specific tax questions!

Lenn,

I am glad you took the time to rework it a bit and thank you for bringing this topic to the forefront as this is one of the most widely abused topics I have seen from my own experience. Keep up the good work.

Good clarification.

hehe.

Yep, that will go over big with clients when they ask about things like this. Go to the IRS website!

"How does an FHA loan work"? go to the HUD website and find out there, Mr. and Mrs. Buyer and so on.

We are supposed to be the experts. Why not go to the IRS website for them and then cut and paste the info and email it back to them with the link. (You could also disclaimit at that point).

Then your trust factor will go thru the roof. You not only answered their question, but you backed it up with a trusted source.

FYI: Plus an origination fee and a point can have a very different meaning depending what part of the country you are from! (I know I'm going against the dictionary meaning)

Back East they are called points (most people don't know what an origination fee is back there). East of the Mississippi we use Origination fees as what we get paid as lenders for doing the loan. Points are used to buy the rate down. People grow up hearing these terms, again depending on where they live, so they do have different connotations.

I know, I know I'm supposed to consult my Attorney and or look up the public statutes before posting a comment to your post, to make sure I did it right, because gosh forbid, I would just ask you.

I was told that even if the seller is paying the closing cost, the n points are deductable to the buyer

Lenn

Great post ...Most clients think we are experts in all fields when it comes to buying a home...I would advice clients on where to get the link and that's it...

Good reminder Lenn. I always remind Buyers and/or Sellers to keep their HUD and share it with the CPA at tax time. ;-) Deductible is always a "good" thing.

Good post Lenn.

A good way to remember...On any mortgage debt that "qualifies" for tax deductibility... any money paid upfront that can be construed as a method for reducing the interest cost on the debt (discount, origination, mortgage broker fee), which in turn reduces the tax deduction over the long haul for the borrower, is allowed by the IRS to be deducted upfront on purchases. The IRS simply views that upfront cost as "pre-paid interest"...which, in essence, it is.

Thanks - and re-blogged!

Lenn,

Note also if the seller buys the rate down (instead of reducing the price) and pays points on behalf of the borrower, the borrower may* be able to deduct those points as well.

A seller interest rate buydown can often be a better use of money than price reduction because it actually could reduce the monthly payment (thereby reducing income required to qualify) more than a lower price would.

For example, let's look at a hypothetical $350,000 sale price with an 80% loan amount of 280,000 at 4.5%, giving a monthly payment of 1419. Suppose the buyer negotiates a 10,500 price reduction. Their new loan amount is 271,600 with monthly payment of 1376, a reduction of $43. Suppose instead the seller pays 8400 to pay points, it could bring the rate down by .75% to 3.75%. So now the monthly payment for 280,000 is 1297, a reduction of $122 in monthly payment.

The seller nets more, the agents earn a slightly higher commission, and the sales price does not contribute to a downward trend in the market. Oh, and one more thing, if the borrower chooses to apply the payment reduction toward principal, they'll pay off the loan a lot faster!

*advise them to consult a tax adviser or CPA.

Thanks for the insight, Lenn, and for providing the link to the IRS publication.

Lenn. No matter what it's called if it is interest or prepaid interest (buy down) then it is deductible. If it goes into the mortgage brokers or lenders pocket and does not effect the interest rate or is not income on the principle then it is not deductible.

In my area an origination fee is a commission to the broker and is NOT interest and is therefore NOT deductible.

But of course I am not the IRS nor am I qualified to give tax advice I(technically).

I am shocked and horrified reading this blog and most of the comments. Almost every single one makes me physically cringe! Unless you are an attorney as well as a licensed real estate professional, or a CPA in addition to your real estate license, any of you that even attempt to give a shade of tax advice or legal advice are walking on very thin ice. Unless you record everything you ever say to your client (and who does that?) it is always a matter of perceptions of memories, and usually Mr. and Mrs. Seller or Mr. and Mrs. Buyer are 2 (them) vs 1 (you) in the memory game of who said exactly what. Prosecutor: "Mr or Mrs Clients, whether it actually was or not, did you consider what your agent said to be tax advice?" Client: "Yes I did". ball game over, you lose. Telling someone that something is "deductible off of their income for tax purposes" is tax advice. How could you possibly think that it was not? The title of this blog is technically "tax advice". Explaining the benefits of renting vs. buying and stating that "the interest you pay on your mortgage is tax deductible and rent is not" is "tax advice". Whether that information is common public knowledge, or common public mistaken knowledge, that is still "tax advice". Interpreting an IRS website and giving your opinion on what that means in relation to your client's taxes is "tax advice". You need to be especially careful in what you write to your clients in email, what you post on your facebook, twitter, or myspace accounts, and what you say at all times. Even if you have a pre-typed disclosure, what you are really saying is: "I cant give you tax advice, but here is some tax advice". In Colorado, you can LOSE YOUR REAL ESTATE LICENSE for giving tax advice, or legal advice, or engineering advice, or any advice that isnt specifically real estate only advice. Telling a client they can "knock down that wall" to expand a room better only come from a real estate professional that is also a certified engineer or licensed contractor. Even telling someone that "the IRS says the origination point is tax deductible" is tax advice. Be careful of what you say and what you write at all times. Protect yourselves!

Thanks for the links!

Lenn,

The longer that you are in this business one becomes laissez-faire when it comes to certain questions from the client, this being one of them. Great advice again; and, the devil is in the details!

I agree with Jason #59 100%. I have never structured a loan for tax deductability nor given any advice on same. I don't even bring up the subject. I can't remember even being asked. Of course I would be asked if I brought the subject up and used it as a sales tool.

We also must remember that the term "origination point(s)" changed on January 1st 2010. Would a client know the difference when it comes to taxation?

We all have a selective memory at times. If you gave them a website how would they intrepret it? Would they feel you were advising them even if you said you were not?

If you gave an "opinion" and told them to go to their accountant, would they go? Who would be at fault? They trust you.

The best advice is if you hear the word deductable immediately respond by saying "talk to you accountant" and go no further.

Lenn ...

Excellent post on this, especially on the "loan originaton fee" portion, as many homeowners miss it. I would only add that this "lump sum" deduction is for primary residences only - it's a bit different for investment/rental property.

Loan points on investment/rental property are still a deductible item, but they cannot be taken in one lump sum as long as the loan is still outstanding. The total points paid are amortized over the life of the loan and deducted annually against the net operating income (NOI) the property produces. For example:

1) If the points were $6,000 and the loan term/maturity was 30 years, the deduction would be $200 per year.

2) If the loan was amortized for payments over 30 years, but had a 5-year due date, then the term is 5 years and the deduction jumps to $1,200 per year.

As long as the loan is outstanding, this continues to occur annually. However, if the property is sold and the loan paid off, the unused portion of the points may then be deducted in full! This would also apply if the owner refinanced the property through a different lender than the one paid off. This is a part of investment real estate that every owner should study. Like you state, with careful planning and the right set of professionals on the team, knowing the "details" can save some tax dollars!

Thank you for allowing me to make this post. I'm actually with a national company, Asset Preservation, Inc., and we specialize in helping owners perform 1031 exchanges on their investment/rental property. We happen to have a nice credit-hour seminar, The Power of Analysis, that teaches agents how to analyze small residential rental properties. It's one of my favorite classes, and in today's climate, it's usually packed.

If you or any of your clients have any questions, please feel free to call at any time.

Cris Anderson, Esq.
Northwest Division Manager
Asset Preservation, Inc.
877.909.1031
cris@apiexchange.com

Great post, Lenn! Re-blogging for our Charlotte audience!

My advice to any of you that even sending them to the IRS site is a dangerous move. You can't possibly know enough about their situation to know if even this move is wise. They will attribute their interpretation of the law to you.

I strongly suggest you all have an accountant you trust to refer the client to for the answer. I would't even advise passing on an accountants advice. You'll be in the hook for bad or improperly used advice

Just an example: Yes its deductible but the person will not exceed the standard deduction so no tax benefit.

NO NO NO... The answer is this...

Last I heard it was, but you know tax laws are always changing. Remember, I am no tax expert, I recommend that you seek the advise of a qualified tax agent. Also, keep in mind that I am a REALTOR and as such am an expert on Real Estate related issues, not taxes. Dont count on my word as I am not shaing a jail cell with ya in Camp Fed or making friends with a guy named Buba!!!

Lenn,

Being a CPA (retired) and a now a real estate Broker, I agree with the comments and concerns raised by Jason #59. However, if just discussing loan origination fees or points, I don't see this as anything that will land anyone in court. Nor do I see any reason to pay a CPA for advice on something as straight forward as loan origination fees or points. However, this is still a very slippery slope and a simple question on loan fees may lead to additonal questions that you might find yourself trying to give an opinion on based on your own experience or reading of tax law, and this could get you in hot water. I'm also a bit uncomfortable even referring clients to go to a website for tax advice (IRS website or any other website) as it still requires an "intrepretation". CPA's don't write tax law, they just intrerpret it and then give advice based on thier interpretation. The difference is that they are licensed to provide "tax advice" based on intrepretation of tax laws. Real estate agents are not.

Again, while not overly concerned with something as simple and straght forward as loan fees, it is just not a good habit to get into. Best to just just tell your clients to make sure they keep a copy of their HUD-1 and other purchase documents for when they have their taxes done so their tax preparer can make sure they have taken advantage of all available tax deductions.

Ben Yost. You'd be surprised at the research material I give my buyer clients. However, I don't blab about everything I do on ActiveRain. After all, my posts are regularly read by my competition....mmmmmmmmmm.

I give my buyers a wealth of information because I'm a fact junkie. But, I back it up with source material.

So there.

Larry. How many folks do their own taxes??? I wouldn't presume that everyone uses a tax pro.

This post was inspired by another post that made the simple statement that Origination fees are NOT tax deductible. I knew differently.

That's the beginning and end.

That said, it was good of loan pros to clearify "origination fee" which the IRS site also does.

Larry. How many folks do their own taxes??? I wouldn't presume that everyone uses a tax pro.

This post was inspired by another post that made the simple statement that Origination fees are NOT tax deductible. I knew differently.

That's the beginning and end.

That said, it was good of loan pros to clearify "origination fee" which the IRS site also does.

Lenn, your post is very timely. With rates as low as they are many people are refinancing and if they paid point(s) on their existing refi, the balance of the unearned point(s) paid may be eligible as a tax deduction. I've run into several borrowers who had to get their tax return ammended to include the unearned point(s) as a deduction.

Yes.... many people prepare thier own taxes, rather than using a tax pro. However.... this is irrelevant. And not something a real estate would normally even be aware of, nor should be. It really does not change anything regarding a real estate agent intrepreting tax law read on an IRS website and advising their client based on their reading or intrepretation. Nor, as Paul #65 correctly pointed out, should a real estate agent refer a client to an IRS website as not everyone interprets tax laws the same way (including CPA's, tax attornys and even IRS personnel) and any incorrect intrepretation may be attributed back to the real estate agent. Also, while this particular issue is not likely to land anyone in tax court, you never know what other "deductions" your client may be taking that may be disallowed during a tax audit, or even worse, considered fraudulent by the IRS agent thereby ending up in a tax dispute or tax court. Is giving a client even what seems to be simple and straight forward advice such as this, worth the potential risk of having your name brought up in a tax dispute or court case? Or, what if the client sees an opportunity here to try to intentionally bring your name up as having advised them to do their own tax research? And then try to sue you? Why even put yourself at risk for something so irrelevant to getting the real estate transaction done? Much better to practice risk management and risk avoidance whenevere you can.

Again... best to just just tell your clients to make sure they keep a copy of their HUD-1 and other purchase documents for when they have their taxes done (or do them themselves) so (they) or their tax preparer can make sure they have taken advantage of all available tax deductions.

I agree

Robert. With whom do you agree? Do you agree with me suggesting (with verification for individual facts) that an origination fee may be deductible??

Or with Larry who doesn't believe that we should write about such matters???

I love the IRS site, it's very easy to understand and search. No tax advice here...but yes, that's my reading of the IRS rules and I have used that deduction on my own purchases.

Karen. I love the IRS site too. I recall how helpful it was to help folks with the tax credit. It's written in plain English and very helpful.

I print that page for home buyers too. They get it at first meeting.

THANKS RE-BLOGGERS.

Re-blogged by 22 agents

I always refer folks to the IRS website.. and to their accountant.. Some things are NOT clear at all... and the tax code is very difficult to understand on some points. There are some great pamphlets for what is deductible as well.

JUL

2010

Lenn

Your post calls to mind a whopper of bad advice given by real estate agents,

loan officers, accountants, attorneys, financial planners, friends relatives and aquaintances.

Are you ready for this one???

Thanks for the link. Tell clients go read it. If you have questions ask your tax professional.

Joan. The nice thing about this site is that it isn't the tax code. It is a consumer site explaining the tax code.

Bob. I haven't the foggiest idea what you mean.

Mike. Sadly, there are millions of folks who buy homes who do not use a "tax professional". They use Turbo Tax.

JUL

2010

ReBlogged by 23 Agents! ;-)

Great Post! Thank you for taking the time to do the research. Proud to have it on my site. Joy

Loy and Jeff. We don't have to give tax advice. Just send folks to the IRS web site.

THANKS RE-BLOGGERS - WOW!

Re-blogged by 25 agents

SEP

2010

This is good stuff. I will have to remember Jeff Bs approach and suggest it when necessary. Thanks.

SEP

2010

Wayne. Perhaps. However, if the IRS looks carefully at a HUD-1, the fact that the origination/point fees includes othere non-deductible fees, they could be disallowed. My accountant is a former IRS examiner and says that they know the difference.

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Lenn Harley, Real Estate Broker, Virginia & Maryland

Leesburg, VA

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Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Address: Lovettsville, Fairfax, Arlington, Alexandria, Stafford, Woodbridge, King George, Fredericksburg, Leesburg in VA., Rockville, Laurel, Columbia, Baltimore, Waldorf, Frederick, Eastern Shore, Bowie, Harford, Annapolis in MD. , Maryland, Virginia

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Maryland and Virginia real estate agents and brokers serving buyers and sellers with experience. Search listings in Maryland and Northern Virginia and get daily updates of new homes for sale by e-mail. Contact Lenn for a tour of homes. REALTORS available every day for home tours. Homefinders network of experienced agents and brokers includes new home specialists, resale specialists and luxury home experts. We can help you with your home buying needs. Homefinders offers discounted 5% listings for Maryland, Northern Virginia home owners. Experienced agents helping buyers and sellers in the Washington Metro area since 1985.

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Find VA real estate agents and Leesburg real estate on ActiveRain.

Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.