1. Yes, allocation is fine. You need to keep the paper trail until all houses sold plus 3 years.
2. Points when refinanced are a separate asset. The fees can be deducted over the life of the new mortgage and are considered intangible. This follows code section 163. Follow these steps:
- Return to your rental property
- Edit/Update
- Scroll down to Assets/Depreciation
- Edit/Update
- Do you want to go directly to your asset summary?
- Yes, continue
- Click the blue Add an Asset button
- Select Intangibles, Other Property, continue
- Tell us more, categorize as Amortizable intangible, continue
- Enter description and expenses, continue
- I purchased it new
- Enter the date of the refinance, continue
- Select a code section, 163, continue
- Recovery period, enter the number of years of the new mortgage, continue
- Continue, continue
3. The schedule E contains the amount of mortgage interest with no relation to source. Entering the 1098 split as you mention is the perfect solution to get the information into the program and correctly onto your return.
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