Which of the Following Statements Regarding the Tax Deductibility of Points

question 109

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 is correct.

---

Definitions:

Funder's First Law

The psychological principle stating that "Great strengths are usually great weaknesses, and surprisingly often the opposite is true as well," highlighting the complexity of personality traits.

Psychological Triad

Refers to the three components of psychological analysis: thoughts, feelings, and behaviors.

Pigeonholing

The practice of classifying or categorizing people, ideas, or objects narrowly and often unfairly, limiting potential or understanding.

Funder's First Law

A principle in psychology which suggests that important or extreme behavior in one situation tends to be important or extreme in other situations as well.