Closing costs basics.
cost associated with acquisition of the property are added to the cost basis of the property so they get capitalized and depreciated over time.
cost associated with acquisition of the loan are amortized and deducted (not depreciated) over the life of the loan. Amortization of loan costs start on the date the property is placed in service, regardless of the origination date of the loan.
Here's what I'm not clear on.
A 30 year loan was acquired in 2000. Property placed in service in 2022. With 8 years left on the loan, when asked for "life of loan" would you use 8 years since that's all that's left on the current loan? Or would you indicate the original 30 years and the program takes into account the actual origination date of the loan with the in service date?
