lucyko wrote:Points paid for a new home purchase is a separate determination and has nothing to do with the mortgage debt limitation
That's not what I've found. Once the points are determined to be interest, they must be points paid on acquisition indebtedness to be deductible, i.e., you go from 461(g) to 163(h)(3). See Rev. Proc. 87-15; Griggs, TC Memo. 2013-2; Davis, TC Memo. 2006-272.
461(g) tells you when
the points are deductible --- either (1) spread out over the term of the loan or (2) deductible if paid in connection with the purchase of a personal residence. That doesn't override the limitation of qualified residence interest on acquisition debt in 163(h)(3)(F), which tells you how much
As a result, I think you’re going to find that only the points paid that are allocable to $750,000 of the mortgage loan are deductible.