A Taxpayer Pays Points to Obtain Financing to Purchase a Second

question 75

True/False

A taxpayer pays points to obtain financing to purchase a second residence.At the election of the taxpayer, the points can be deducted as interest expense for the year paid.

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Definitions:

Investment

The allocation of resources, usually financial, into assets with the expectation of generating income or profit in the future.

Saving Rate

The proportion of disposable income that is saved by individuals or households over a period, rather than being spent.

Interest Rates

Rates at which interest is charged or paid for the use of money, typically expressed as an annual percentage rate.

Gross Investment

The total amount of money spent on new capital assets before accounting for depreciation.