Points for refinancing

[Gretel]

TTB 4-12: It appears that points charged for refinancing can be amortized even if rolled over into refinance and do not need to be paid. In contrast points charged when purchasing a home need to be actually paid to qualify for deduction (or amortization by choice).

Do I have this right?

I thought points always need to be actually paid.

[taxea]

sorry delete button not working

[Burke]

TTB 4-12: It appears that points charged for refinancing can be amortized even if rolled over into refinance and do not need to be paid. In contrast points charged when purchasing a home need to be actually paid to qualify for deduction (or amortization by choice).Do I have this right?I thought points always need to be actually paid.

You are partly correct. For points to be FULLY deducted in one year on the purchase of a home, they need to have paid at least as much as the points are at the closing. For amortization over the life of the loan, under all the different rules, that rule does not apply.

[Gretel]

Thanks, Burke. Just to be clear: Points qualify for amortization no matter if paid out of pocket or rolled into loan, right?

What in the world is OID then for, which is also mentioned in TTB? Just to confuse me?