Hud settlement - points

[SMF]

Settlement sheet #801 has Origination charge (including origination
points $0) of $866.95 on loan of $149900. No points on 1098. We often
see origination charges here that we deduct as points paid on original
home purchase,however, this one is not an obvious % and has the
(including origination points $0) on line. Makes us think it's not
points but ????? Advise? Thanks

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[Alan]

On 2/10/12 9:55 AM, SMF wrote:
> Settlement sheet #801 has Origination charge (including origination
> points $0) of $866.95 on loan of $149900. No points on 1098. We often
> see origination charges here that we deduct as points paid on original
> home purchase,however, this one is not an obvious % and has the
> (including origination points $0) on line. Makes us think it's not
> points but ????? Advise? Thanks
>

Points (those that meet the tax definition) should be on line 802. E.g.,
if you borrow money with no points, the lender is going to have an
origination charge. It's their fee for processing the loan. They should
put it on Line 801. If the loan has points associated with buying down
the interest rate, the amount should be on Line 802.
A very confusing issue as all lenders use different terminology.

The full definition of deductible points can be found in IRS Pub 530.
There's 8 or 9 requirements. A key requirement is that the amount is a
percentage of the loan.

--
Alan
http://taxtopics.net