I sold $250k worth of stock to pay for a mortgage down payment and will pay long term capital gains on that which will probably be at least $35k at 15%. Does it make sense to purchase a point on the mortgage (e.g. $10,000k) because points are tax deductible? Seems like paying more mortgage interest up front (ie buying a point) makes sense this year because it will help offset that capital gain I am getting hit with.
Tax Deductible Mortgage Points to Offset Capital Gains
byu/Icy-Alps-6886 inpersonalfinance
Posted by Icy-Alps-6886
5 Comments
Will you itemize or take the standard deduction?
Paying $10k in points to save $1,500 in taxes is not a good idea unless paying $10k in points is a good idea without the tax savings.
Only a financial model will tell you. Build it in excel. Use all of your assumptions including your with and without tax liability. I won’t be easy. Asking this group is pointless.
Did you buy this stock for ~$10,000? You only have to pay cap gains on the actual gains, not the overall selling price. $35k just sounds high to me unless you bought this stock when it was really, really low.
Remember that the 15% LTCG tax is a federal level, and you’ll also have state tax. Plus since your MAGI is more than 250 k, there’s also the 3.8% net income investment tax (sic?)