Answer:
D) $6,400
Step-by-step explanation:
Each point is worth principal x 1% = $320,000 x 1% = $3,200, times 2 points = $6,400
The IRS considers mortgage points are interest paid in advance, therefore the taxpayer can decide to deduct them completely during the current year's tax return or prorate them for the total length of the debt.
Unless their income taxes are too low this year, generally people will deduct all of the amount at once because the IRS doesn't recognize any interest on deductions or taxes paid in advance. Following the basic premise of finance, that the value of money decreases in time, then $1 less today is worth more than $1 less in the future.