FWIW, I disagree with your analysis here. While it was in answer to a question regarding grants through NFPs, the answer stated generally, and was left open. Further, they preceded to discuss seller financed grants, which would have nothing to do with NFP grant programs. My interpretation of their answer is that "generally" expands past the scope of NFPs.
Logic states that a bank loan is an incentive...like a discount. It is largely off setting closing and mortgage related fees that would be considered basis adjustments. Accordingly, I think the correct approach is to treat it as a basis offset, as you would the price of something you purchase.
If the IRS would like to argue otherwise, I'd reconsider when challenged...but until that point, I'd offset the income. There's no need to make an IRS argument for them, and I'd hardly call this argument a violation of professional standards.
