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From: stewart@ihldt.UUCP (R. J. Stewart)
Newsgroups: net.invest
Subject: Re: Tax deduction for cost of purchasing a home
Message-ID: <2263@ihldt.UUCP>
Date: Thu, 1-Mar-84 09:25:40 EST
Article-I.D.: ihldt.2263
Posted: Thu Mar  1 09:25:40 1984
Date-Received: Fri, 2-Mar-84 14:17:24 EST
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A small point, but one which might come back to get you one day, is that
you shouldn't refer to mortgage points as "prepaid interest".  Points
are deductible in the year that you pay them.  Prepaid interest is
different, however, and deductions must be spread over the life of the
loan.

The example of prepaid interest given in Lasser's Tax Guide involves
someone who needs a deduction in a particular year, so takes out a loan
and pays all the interest up front.  This person would not be allowed to
take the entire interest deduction that year; they could only take the
amount they would *normally* have paid.  BTW, Lasser's answers a lot of
the questions you asked about deducting house expenses.

All the usual disclaimers about not being a tax attorney, etc.

Bob Stewart