Is PMI tax-deductible?

[FLBK7]

Today at work several people were commenting that if you bought a home after 2006 and you pay PMI (whether VA, FHA or private), the PMI is considered an interest expense and is fully deductible, just like your mortgage loan interest. Apparently this is a new law??

Sounds too good to be true. Has anyone else heard this?

[FLBK7]

I found the answer, and it's "yes." I checked the IRS website first, and after going through a lot of mumbo jumbo I confirmed that yes, it's a new, last-minute law that only applied to the 2007 tax year unless Congress renews it: mortgage insurance is deductible just like mortgage interest, but ONLY for properties purchased in 2007. Or for properties refinanced in 2007. I missed the deduction by 2 weeks, since I closed on my property in December 2006. Oh well... The positive is that I don't have to file an amended tax return.

This article explains it all in much simpler terms than the IRS:

http://www.post-gazette.com/pg/06357/748079-30.stm