The "Mortgage Point" Audit: Why Box 6 on Your 1098 Is Lying to You

You refinanced your home or bought a new one. You paid thousands in "Points" to lower your rate. You wait for Form 1098 to tell you how much to deduct. You open it, and Box 6 is BLANK. You assume you get $0. WRONG. Lenders are not required to report refinance points in Box 6, even though they are fully deductible over the life of the loan.

As The Finance Observer, I’ve performed a forensic review of IRS Publication 936 and the "Netting Rule." In this video, we dissect the "Amortization" math (why you deduct $10/month instead of $3,600 at once), the "Same Lender" trap (why refinancing with the same bank kills your write-off), and the specific line on Schedule A where you must manually enter these numbers.

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FORENSIC BREAKDOWN:

0:00 The "Blank Box" Mystery: Why Form 1098 often hides your deduction

1:12 The Definition: Points = Prepaid Interest (The key to tax savings)

1:30 The Two Paths: Immediate Deduction (Purchase) vs. Amortization (Refinance)

2:15 The "Netting Rule": How to prove you paid with your own funds (without writing a check)

3:00 The "Amortization" Audit: Spreading the deduction over 360 months (The Refinance Rule)

3:32 The Math: Turning $3,600 of points into a $120 annual write-off

4:15 The "Safe Harbor" Trap: Why Box 6 is blank for refinances

4:46 The Solution: Schedule A Line 8c (The "Catchall" for unreported points)

5:18 The "Seller Paid" Audit: How to deduct points you didn't even pay

5:47 The "Payoff" Bonus: Deducting the remaining balance when you sell or refinance again

DISCLAIMER: I am The Finance Observer. This content is for educational purposes only. Mortgage interest and points deductions are subject to Itemized Deduction limitations; always consult a qualified CPA to verify your specific Schedule A entries.

Видео The "Mortgage Point" Audit: Why Box 6 on Your 1098 Is Lying to You канала The Finance Observer