While Points Paid to Purchase a Residence Are Deductible as Interest

question 24

True/False

While points paid to purchase a residence are deductible as interest in the period paid,points associated with the refinancing of a residence must be amortized and deducted over the life of the loan.

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Definitions:

Contingent Liability

A potential financial obligation that may arise depending on the outcome of a future event.

Likelihood

The probability or chance of an event occurring.

Contingency

An uncertain future event that could affect financial performance or outcomes.

Employee Earnings Record

A cumulative record of each employee’s gross earnings, deductions, and net pay during the year.