Matthew purchases a new principal residence in 2012 and pays points of $2,000 to obtain a mortgage loan. What is the proper tax treatment for the points paid?
a. The points are a nondeductible personal expense
b. The points must be amortized over the life of the loan
c. The points must be amortized over 5 years
d. The points must be capitalized into the cost of the residence
e. The points are fully deductible in 2012