Tax question about house interest? How much can you write off?

Question

I just got back my tax intersted and we just bought a house last year.
My stub says
Box 1. Mortagage intersted recieved from payers borrowers
$7,698.61
Box 2. Points paid on purchase of principal redidence
$1,700.00

Total intersted applied 2006 $7,698.61

Which is the intersted I am allowed to write off??

Thanks!!!

Answer 1

I agree w/ the Box 1 assessment, that you can deduct the entire value as mortgage interest paid for 2006.

I thought, if this is your principal residence, you could write off all of your points in the same year and not have to amortize them. That's what I've done the three times I've bought our principal residence.

Answer 2

As it was for a purchase, both of the amounts (Box 1 and Box 2) are deductable on your Schedule A as an Itemized Deduction.

Answer 3

I'm an accountant. You can deduct all of the $7,698.61. But the points have to be amortized over the life of the mortgage. So, if your mortgage is for 30 years, you can deduct $56.67 per year for the next 30 years. If you retire the debt before 30 years, you can deduct the unamortized balance in that year.

Answer 4

All of it.
Interest is listed in one area of the form, while points paid is listed on another area of the form.
File 1040 with schedule "A".