Toxic Torts White Collar Crime Deductibility of home mortgage points. An IRS private letter ruling gives taxpayers more flexibility in cases where they cannot use the full deduction in the current year. A couple paid 1.25 points to buy a house. Because their total itemized deductions for the year, including the points, were less than the standard deduction available to them, they wanted to take the standard deduction and spread the points out over the life of the loan.
Points are prepaid interest payments that are paid to the lender when buying or refinancing a home.