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Author: Pensorio Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Deducting for refi penalty in interest Date: 1/25/2002 5:49 PM
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Hi all,

Sorry if this is a duplicate question, but I couldn't find quite the same scenario on this board:

When we refinanced early in 2001, we had to pay a "prepayment penalty" to our old mortgage company of $5000 that is included in the Mortgage Interest Received amount (Box 1 of the Form 1098). Before the refiance we had already paid $4000 in mortgage interest, so our total mortgage interest paid to the old mortgage company is $9000 (that's the full amount listed in Box 1 on the 1098).

My question: since the prepayment penalty was counted as interest, is the full amount of $9000 deductable on Schedule A, or do we need to remove the prepayment portion and only deduct $4000 on Schedule A?

Thank you for any help you can provide!
-Pensorio
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