When An Expense Is Deductible Cash method Deduct expenses when paid Prepaid expenses which extend beyond the end of tax year must be amortized Points paid in principal residence Clearly disclosed Secured by residenceWhen An Expense Is Deductible • Cash method – Deduct expenses when paid – Prepaid expenses which extend beyond the end of tax year must be amortized – Points paid in principal residence • Clearly disclosed • Secured by residence