Question

Deducting Loan Origination Fees

Forum|Forum|5 years ago
April 20, 2021
1 reply
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We bought a rental in 2019. I did amortized the loan origination fees in 2019 for 15 years - the life of the loan.

In December 2020 we decided to pay off the loan since our money was not earning any interest in CDs. Since the life of the loan is over, how do I handle the amount remaining to be amortized? I haven't started my taxes yet so not sure if Turbo Tax will ask me the right questions or if I need to enter information somewhere on my own. I am assuming I can deduct the remainder of the fee?? Any help you can give me would be appreciated.

Carl11_2

Employee

Since the life of the loan is over, how do I handle the amount remaining to be amortized?

Simply work through that asset and on the screen for "I stopped using this asset in 2020" select YES.

On the "Special Handling Required?" screen, select YES.

On the next screen select the option to have the program transfer to remaining fees to be deducted, to Misc Expenses. That does it, and 2020 will be the last year this asset should appear on your tax return. You should work through the rental expenses section to the very end of that section for Miscellaneous Expenses, and confirm those fees are shown as a misc. deduction.

If by some chance that particular asset gets imported into the 2021 tax return next year, you can just delete it then.