Pub 936

Points paid by the seller. The term "points" includes loan placement fees that the
   seller pays to the lender to arrange financing for the buyer. 

   Treatment by seller. The seller cannot deduct these fees as interest. But they are
   a selling expense that reduces the seller's amount realized. 

   Treatment by buyer. The buyer reduces the basis of the home by the amount of
   the seller-paid points and treats the points as if he or she had paid them. If all the
   tests under the Exception are met, the buyer deducts the points in the year paid. If
   any of those tests is not met, the buyer deducts the points over the life of the loan.