This week's column will again focus on that longtime bane of man's existence: taxes.

More specifically, I'm looking at the second of two recent questions I received regarding tax issues.

The first dealt with questions about the tax status of an inherited individual retirement account. After two weeks of exploring that issue, we've probably only scratched the surface, but I think it's time to move on.

This week, Preston Eichers, CPA with Hansen, Barnett & Maxwell in Salt Lake City, is helping out with a mortgage refinancing tax question sent in by a reader named David.

"If it's my first refi for $300,000 and I pay $4,000 in points that are rolled into the refi, both the interest on the loan and points are amortized over 30 years," David wrote. "But is the computation for each component different? (In other words), will I just get a tax statement for the interest paid on $304,000, or will it be broken down to the declining, annual interest on the $300,000 component, and the fixed 1/30th points component?"

Preston responded in an e-mail that certain rules apply to all refinanced loans for a personal residence, whether it is the first refinancing or the tenth.

"The borrower must look at the underlying reason for the refinancing of the personal residence," he wrote.

If the refinancing is only meant to change the mortgage to get a better term or lower interest rate, he wrote, the points paid at closing are amortized over the life of the loan.

"Generally, that amortization is straight-line, so on a 30-year loan with $4,000 of points being paid, the annual amount would be $4,000 (divided by) 30, (or) $133.33 per year," Preston wrote. "That is the easiest and most simple computation."

Preston added that, if the deal is designed to refinance an existing mortgage and finance new construction or remodeling, then the additional amount borrowed is called "acquisition debt."

"In this case, the points paid on the refinancing could be allocated between the amount refinanced for the new construction/remodeling (acquisition debt) versus the amount of debt refinanced," he wrote. "With this allocation, the points attributable to the new construction (acquisition debt) would be currently deductible in the year paid and the points attributable to the refinancing of debt would be amortized over the life of the refinanced loan. "

None of this information would come from the bank, Preston wrote, and he would not expect the bank to be aware of how the points are treated on a tax return.

"He will simply get a Form 1098 from the bank for the amount of interest he has paid on the total debt of $304,000," Preston wrote. "He will need to keep his own separate schedule of how much of the $4,000 to amortize on this tax return each year and add that to his return."

That's probably not as simple as you hoped it would be, David, but tax issues never are! At any rate, I hope it gives you some guidance on how to deal with the situation.

If any of you other readers face tax issues — or have personal finance comments or questions — send them to gkratz@desnews.com or to the Deseret News, P.O. Box 1257, Salt Lake City, UT 84110.

e-mail: gkratz@desnews.com