Did you finance or refinance this property in 2020? I am going to assume you did. Here's how to correctly enter your points/origination fees so that they are amortized (not capitalzed) and deducted (not depreciated) over the life of the loan.
First, delete any/all entries you've made that deal with your points/origination fees first. Then use the below guidance.
In the assets/depreciation section click the button to add another asset.
- Select Intangibles/Other Property and continue
- Select Amortizable Intangibles and continue.
- You can describe it as "financing fees", "origination fees" or whatever you want. Enter the amount, and the date will typically be the closing date of the loan. Then continue.
- Select "purchased new" and select "used 100% for business". For the date, that will typically be the closing date of the sale. but it most certainly can be the date the property was first "available for rent". Then continue.
- The code section is 163: loan fees, and continue.
- Enter the length of the loan in years. Typically it's either 15 years or 30 years. Then continue.
-You can "show details" if you want. Then click continue and you're done.
