Mortgage Insurance

[Earl]

Prepaid mortgage insurance is being amortized over 84 months and
the mortgage is refinanced with new lender with no mortgage insurance
required.

Do we have to keep amortizing over the remainder of the 84 months or
do we deduct in full in year of refinance.

[ChEAr$]

write off, just like remaining points when loan is concluded.

[ddoshan]

I don't think you can write off the balance of the MIP in this case. According to Pub 17 no deduction is allowed for the unamortized balance if the mortgage is satisfied before its term.

[rtsietsema]

Exceptions

Correct on not allowing, except for those listed from Pulication 17. See the excerpt from the Publication 17....



Special rules for prepaid mortgage insurance. Generally, if you paid premiums for qualified mortgage insurance that are allocable to periods after the close of the tax year, such premiums are treated as paid in the period to which they are allocated. You must allocate the premiums over the shorter of the stated term of the mortgage or 84 months, beginning with the month the insurance was obtained. No deduction is allowed for the unamortized balance if the mortgage is satisfied before its term. This paragraph does not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service.