Drake Tax - Amortizing Mortgage Points

How to amortize "points" to carry to Schedule A from the 4562

Enter screen 4562 as follows to amortize points.

• In the For drop list, select A.

• To direct the amortization to Schedule A, either

  • For Method, select PTS – Amortization of Points for Schedule A and enter any appropriate Description.

  • For Description, enter a description that begins with points, such as points home purchase and for Method select AMT – Amortization (or PTS).

• Enter Date Acquired

• Enter Cost (the amount of points paid).

• Enter Life of the loan. Points paid only to borrow money are generally deductible over the life of the loan.

The allowed deduction is carried to Schedule A, line 8c.

See Tax Topic 504 and Schedule A Instructions for more information about home mortgage points.