If I refinance with the same lender, is the remaining portion of the points paid on the closing deductible?

Q: In 2003, we refinanced for the second time with the same lender. The first refinance was in 2001. We paid points on both closings. Is the remaining portion of the points paid on the first closing deductible in full in 2003? - George, Hopkinton

The following answer was provided by Mark Misselbeck, CPA, Levine Katz Nannis & Solomon PC, Needham.

A: When a loan is refinanced with the same lender (as is specified in your question), the IRS holds that the benefit first secured by paying points on the origination of the lending arrangement is continued into the refinancing. It requires that the unamortized balance of the original points be added to any newly paid points and the total be amortized over the life of the refinanced loan.