Just for clarity,I'm going to say what I'm sure you already know, then give details on how to enter it.
- Expenses associated with acquisition of the property are added to the cost basis of the property and depreciated over time. An example of such an expense would be the title transfer fees paid to remove the seller's name from the title and replace it with the buyer's name.
- Expenses associated with acquisition of the loan are amortized (not capitalized) and deducted (not depreciated) over the life of the loan. An example of such an expense would be loan application fees, as well as property survey fees if a property survey was required by the lender as a condition of loan approval.
Here's how to enter the points in the Assets/Depreciation section.. (does not apply to entering the property itself, or any other property assets.)
- Select the Add and Asset button. (go straight to the asset summary if presented that option)
- Select Intangibles/Other Property, then continue.
- Select Amortizable Intangibles, then continue.
- Describe it as something like "2022 Financing Fees". Then enter the amount, and the closing date of the loan. Then continue.
- Select "purchased new", then "100% business use", enter the closing date of the loan (again), then continue.
- Code section is 163:Loan Fees, then continue.
- Useful Life in Years is the length of the loan, then continue.
- You can "show details" if you like. Then continue, and that does it
