Are Discount Points Tax Deductible
In general, discount points you pay to obtain a mortgage on your primary residence are treated as prepaid interest and may be deducted in the year you pay them. Points paid on a home purchase are usually deducted all at once; points on a refinance are typically deducted ratably over the life of the loan.
Points on an investment or rental property are generally deducted over the loan term, not all at once. The exact treatment depends on how the loan is used, your income, and the year’s tax law.
This page is a plain-English summary, not tax advice. The figures and rules change, so confirm the current treatment with a CPA or on the IRS website before you file.