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Author: dharmadollars Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120820  
Subject: Re: Buydown fees - deductible? Date: 4/14/1999 8:52 AM
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Great question. An aggressive filer would claim them. A fine point would be on whose side of the settlement sheet they were posted.

Third, when the mortgage company issues the 1098 for interest paid at the end of the year, that represents the interest at the note rate, not the temporarily bought down rate. Those buydown dollars go into a suspense account and act as a subsidy to you payment to bring the amount paid up to that required for the note rate. So you get the benefit of the deduction over the period of the buydown automatically.

Claiming them in the year of purchase is, in effect, an attempt to double claim. Many people get away with it because it is "under the radar". This observation should not be construed to be advice to do so.
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