client refinanced his house and also incurred mortgage insurance premiums expense. He didn't pay the premiums but was rolled into his mortgage balance. I suppose he paid a portion with each monthly installment. Does he lose this deduction?
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You need to check his escrow statement and see if the bank is paying the mtge ins each month or if it was all prepaid up front (see HUD-1). -
Calculating the amount
In trying to answer my original question, TTB 4-10 says: The taxpayer may allocate the prepaid premium ratably over the shorter of: The stated term of the mortgage, or 84 months (7 years), beginning with the month in which the insurance was obtained. I guess this is the answer.Comment
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