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Points -- not calculating amortization?

I purchased a vacation rental in 2023 and the loan had points.  I went to amortize it by following the instructions:

Entered as intangibles, other property --> selected amortizable intangibles --> entered in the description, cost and date of the loan closed --> selected "I purchased this asset" --> clicked Yes I've always used this item 100% and entered the loan closing date again ---> selected code section 163: Loan fees --> entered the life of the loan 30 

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.  In any case, whether I select yes or no it calculates the expense this year as $0.  What am I doing wrong??

 

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2 Replies
AmyC
Expert Alumni

Points -- not calculating amortization?

You can probably deduct the points according to  Rental Expenses | Internal Revenue Service  If they are not deductible, they are added to the basis of the house.

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Carl
Level 15

Points -- not calculating amortization?

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.)

 

 

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