Final answer:
Points on an original home loan can be fully deductible in the year they are paid, while points on a refinance must be deducted over the life of the loan.
Step-by-step explanation:
Regarding the tax deductibility of points related to a home mortgage, the correct statement is that 'Points paid in the form of prepaid interest on an original home loan are deductible in the year they are paid.' For a home purchase, if certain conditions are met, these points, also known as loan origination fees, can be fully deductible in the year the loan is taken out, as opposed to being spread out over the life of the loan. However, when it comes to a refinance, points must usually be deducted over the life of the new loan.