Which of the Following Statements Regarding the Tax Deductibility of Points

question 91

Multiple Choice

Which of the following statements regarding the tax deductibility of points related to a home mortgage is correct?

• A) Points paid in the form of a loan origination fee on an original home loan are deductible over the life of the loan.
• B) Points paid in the form of prepaid interest on an original home loan are deductible over the life of the loan.
• C) Points paid in the form of prepaid interest on a refinance are deductible over the life of the loan.
• D) None of these statements are correct.

---

Definitions:

Precipitation

Any form of water - liquid or solid - falling from the sky, including rain, snow, sleet, and hail.

Karst

A landscape formed from the dissolution of soluble rocks such as limestone, characterized by sinkholes, caves, and underground rivers.

Iron and Aluminum

Essential metals abundant in the Earth's crust, often forming various minerals and playing crucial roles in industrial applications.

Leached

Leached describes the process by which soluble nutrients or chemicals are washed out of soil or materials due to the movement of water.