When Are Points Paid on a Loan Deductible as Interest

question 255

Essay

When are points paid on a loan deductible as interest expense?

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Definitions:

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Variable Costs

Expenses that change in proportion to the activity of a business, such as the cost of raw materials or production volume.

Total Revenue

The amount of money generated from sales of goods or services before any expenses are subtracted.

Variable Costs

Costs that change in proportion to the level of production or sales activities of a business.