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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Mortgage points and standard deduction Date: 2/11/1999 7:55 PM
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[[ There was general consensus on this board that on the home purchase you can
claim a deduction for mortgage points only in the year of purchase, and if you
are better off with standard deduction, you lose deduction for points.]]

Right...that was the standard thinking...

[[ But today's
Wall Street Journal front page column "Tax Report" described an IRS
private-letter ruling, when a couple paid 1.25 points late in the year for a home
purchase. They asked if they can claim a standard deductionfor that year and
amortize the points over the remaining life of the loan. IRS said YES!]]

Yup...that what the PLR said all right. First...remember that a PLR ruling ONLY applies to the specific taxpayer involved. It does not have the "authority" of a tax regulation. So YOU can't rely on that specific PLR and feel safe in your tax position.

That being said, you at least have a bit of comfort knowing that the amortization method has been given at least a partial blessing at the IRS level.

If the truth be told, MANY tax professionals have taken this position on points in the past. The area is a bit grey, and you could really look at it either way. It appears that the IRS saw it that way also.

[[ If any CPA's on this board could comment on that...]]

Those are my comments...
TMF Taxes
Roy
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