Here's the more simplified version.
- Cost related to the acquisition of the loan are amortized (not capitalized) and deducted (not depreciated) over the life of the loan. An example of this would be your loan acquisition fee and if your lender required a survey as part of the loan approval process, the servey fee.
- Cost related to acquisition of the property are added to the cost basis of the property. They get capitalized and depreciated over time. An example of this would be the property transfer fees paid at the courthouse to change the name on the deed from the seller, to you.
Depending on your specific situation, the program may (or may not) split these cost appropriately for you. If not, then your loan acquisition costs are entered in the assets/depreciation section as "other asset" so that you can identify those cost as an "amortizable" asset, and not a capitalized asset.
