It then asks if I want to take a one time special deduction? I don't think that is accurate as I believe it has to be straight line.
You are correct. On business property, which is what rental property is, you have to spread out the points over the life of the loan.
In any case, whether I select yes or no it calculates the expense this year as $0. What am I doing wrong??
Probably nothing. What is your loan/property acquisition/closing date? If late December, it's perfectly possible for there to be $0 deduction that first year. It just depends on "all" the numbers. (You didn't provide any dates or numbers, so I can only guess.)
