points

Taxpayer had a 150k mortgage.

He refinanced for a 350k mortgage.

The extra funds are to add an addition to the house.

They paid 5k in points.

Can i fully deduct the points?

I do not think so. You need to pro-rate and the points based on the original note must be amortized.

https://www.irs.gov/taxtopics/tc504

thank you...think you are correct...item 7 You use your loan to buy or build your main home. in essence some of the points went torward refinancing the princiapl from the original mtg.

Points related to a refi are prorated over the life of the new mortgage

For the extra $200k in debt, isn’t that considered “acquisition indebtedness”? Should the points be allocated to refi/acquisition debt?

Refer to the link in post #3.

You can also fully deduct (in the year paid) points paid on a loan to improve your main home if you meet tests one through six above.

Points that don't meet these requirements may be deducted ratably over the life of the loan. You can deduct points paid for refinancing generally only over the life of the new mortgage. However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first six requirements stated above, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. You can deduct the rest of the points over the life of the loan.