I'm not sure this is correct for a rental property. You can amortize/depreciate much more than just the points paid. Per IRS Publication 551 (https://www.irs.gov/pub/irs-pdf/p551.pdf) you can amortize the following over the life of the loan:
Charges connected with getting a loan. The following are examples of these charges.
a.Points (discount points, loan origination fees).
b.Mortgage insurance premiums.
c.Loan assumption fees.
d.Cost of a credit report.
e.Fees for an appraisal required by a lender
Then in addition you add the cost of these items to the "basis" for the property:
- Abstract fees (abstract of title fees).
- Charges for installing utility services.
- Legal fees (including title search and preparation of the sales contract and deed).
- Recording fees.
- Surveys.
- Transfer taxes.
- Owner's title insurance.
- Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions.
My question at this point is just how do I add these to the basis in Turbo Tax. Do I create a new asset and amortize it over 27.5 years, OR do I simply go into my property (already listed from previous years) and adjust the cost by the dollar amount of these items?
Thanks,
Matt.
