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

Reblogger
Real Estate Agent with RE/MAX Solutions- OZARK MISSOURI

My reader's know how I love to re-blog.  With peers in my network like Lenn it is easy to get excellent content to share.

Let's get you Under Contract and Closed so you can see for yourself.  I don't give tax advice but I do list and sell properties.

Call your CPA or check out the IRS Web Page if you are curious what this article is about.  Call me when you are ready to purchase in the beautiful state of Missouri!-  be good  - cheryl

Original content by Lenn Harley 303829;0225082372

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

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

Agents and loan officers sometimes advise buyers and sellers about the deductability 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

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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).

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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. 

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


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Comments (1)

Anonymous
Jim Gilly

Just came across your blog and read where you state that the loan origination fee is tax deductible.  Did you happen to read the IRS link that you provided?  If you didn't read it.  If you did re-read it and then tell me if you still want to make the claim you did.

Dec 05, 2010 09:27 PM
#1