Loan origination Fee

Forum|Forum|4 days ago
July 14, 2026
5 replies
61 views

When a Taxpayer buys a new principal residence and the closing statement reflects a $6,120 Loan Origination Fee but the 1098 shows $0 for points paid on purchase of principal residence in Box 6, is that $6,120 deductible as interest expense on Schedule A?

ProSeries Professional

BobKamman

Level 15

You may be missing a second 1098 from the mortgage company that actually originated the loan but quickly sold it in the first month or two, to the one that now owns it (or at least services it).

George4Tacks

Level 15

The $6,120 is the points. It should be amortized over the life of the loan. As Bob said, there is likely another 1098 for the interest on the loan.

Answers are easy. Questions are hard!

BobKamman

Level 15

“You can deduct the points to obtain a mortgage on your principal residence, in the year you pay them, if you use the cash method of accounting.” That’s what IRS says. Do not amortize them.

Does the closing statement show the seller paid them? Still deductible by the buyer.

sjrcpa

Level 15

Is it a percent of the loan?

The more I know the more I don’t know.

T

Terry53029

Intuit Community Champion

If the closing statement shows the loan Origination Fee as interest paid you would deduct it as points, but it has to say the amount is a percent of loan. I always ask client for closing papers, as it is the only sure way to see if you can use the fee as points. Deductible as Points: If the origination fee is calculated as a percentage of the loan amount and charged to get your mortgage (often called points or discount points), the IRS considers this prepaid interest. You can deduct it in full for the tax year you bought your home, provided you itemize deductions and meet IRS conditions

BobKamman

Level 15

Any number can be a percentage of the loan amount, it doesn’t have to be a “round” one. I’ve seen them for something like 1 3/8 % (1.375). If your bank charges a loan origination fee of 3.14159%, it’s still as easy as pie to deduct it.

sjrcpa

Level 15

@BobKamman I agree anything can be expressed as a percent. I have always seen points computed in eights.

The more I know the more I don’t know.

You may be missing a second 1098 from the mortgage company that actually originated the loan but quickly sold it in the first month or two, to the one that now owns it (or at least services it).

“You can deduct the points to obtain a mortgage on your principal residence, in the year you pay them, if you use the cash method of accounting.” That’s what IRS says. Do not amortize them.

Does the closing statement show the seller paid them? Still deductible by the buyer.

Any number can be a percentage of the loan amount, it doesn’t have to be a “round” one. I’ve seen them for something like 1 3/8 % (1.375). If your bank charges a loan origination fee of 3.14159%, it’s still as easy as pie to deduct it.

Sign up

Login with SSO

Let's get you signed in

Login with SSO