I spent an hour finding this from TT live community Q&A. Note, appraisal fee and credit report are not deductible. here is the step by step instruction to fill in the loan originatio fee by a tax prefessional.
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Points (aka loan origination fees) paid from the purchase of a rental property must be capitalized and then written off over the life of the loan. This is called amortization.
Before you can enter the points as an asset, you first need to enter in the information about the rental.
After you have done this, then you can add the points more effectively.
To navigate to the income section, click on the "Federal Taxes" tab.
Then click on "Wages & Income".
Then click on the link that says "Explore on my Own".
This will take you to the summary screen for the various types of income.
Then scroll to the "Rentals and Royalties" section. Click "Update".
Remember that this is after you have already made the initial set up of the property.
About the third screen in the heading will say, "Rental and Royalty Summary". If you already entered the property, then it will be displayed in the middle of the screen and it will have an "Edit" button next to it. Click on "Edit".
Now, go through all the screens and near the end of this section (about 22 screens in) you will get to a screen that says, "Review your ______ Rental Summary".
This screen will have 4 main options.
"Rental Income"
"Expenses"
"Assets/Depreciation"
"Vehicle Expense"
You will want to click on "Assets/Depreciation".
Next screen, click "Add an Asset".
Then on "Describe this asset" click the first option "Rental Real Estate Property" (radio button).
Next screen says "Tell us a Little More". Here you want to click on the radio button second from the bottom that says "Amortizable Intangibles".
Next screen fill out the details about the points.
The next screen says "Select a code Section". Here there is a drop down and you will want to select "163 Loan Fees".
Next screen "Useful Life (in years)". This is where you enter how many years the loan is for.
That should be it.
Before you can enter the points as an asset, you first need to enter in the information about the rental.
After you have done this, then you can add the points more effectively.
To navigate to the income section, click on the "Federal Taxes" tab.
Then click on "Wages & Income".
Then click on the link that says "Explore on my Own".
This will take you to the summary screen for the various types of income.
Then scroll to the "Rentals and Royalties" section. Click "Update".
Remember that this is after you have already made the initial set up of the property.
About the third screen in the heading will say, "Rental and Royalty Summary". If you already entered the property, then it will be displayed in the middle of the screen and it will have an "Edit" button next to it. Click on "Edit".
Now, go through all the screens and near the end of this section (about 22 screens in) you will get to a screen that says, "Review your ______ Rental Summary".
This screen will have 4 main options.
"Rental Income"
"Expenses"
"Assets/Depreciation"
"Vehicle Expense"
You will want to click on "Assets/Depreciation".
Next screen, click "Add an Asset".
Then on "Describe this asset" click the first option "Rental Real Estate Property" (radio button).
Next screen says "Tell us a Little More". Here you want to click on the radio button second from the bottom that says "Amortizable Intangibles".
Next screen fill out the details about the points.
The next screen says "Select a code Section". Here there is a drop down and you will want to select "163 Loan Fees".
Next screen "Useful Life (in years)". This is where you enter how many years the loan is for.
That should be it.
( Answered yesterday 01:49pm ,Views by community 4 )
