Question

How To Allocate Lender Credit For Tax Purposes

Forum|Forum|5 years ago
May 4, 2021
1 reply
0 views

I have a rental property I purchased and received a $3,500 "lender credit." My loan/closing costs are as follows:

Loan Costs (points, fees, appraisal): $2,500

Title/Government Costs: $2,000

Normally I would amortize the loan costs and add the non-loan costs to my property's basis. How does the $3,500 lender credit offset these? Can I choose which tax category to apply the credit to?

Thanks!

DaveF1006

There is probably not a set method for doing this but what i would do is subtract these from your points and then amortize the remaining points. This way the lender's credit is accounted for.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"