Where do I enter mortgage fees for a new rental property. Also, where/how do I enter seller credits

Per Publication 527 - IRS.gov Chapter 2, page 7, no, bank origination charges like Points, are not added to the basis.

Enter points in the Assets/Depreciation section of the Review Rental Summary page. You will add it as an asset (Intangibles, Other property). Then it will be amortized over the life of the loan.

Underwriting fees, appraisal fee, home inspection and credit reports are entered as expenses under Professional Fees.

 Settlement fees and other costs. The following settlement fees and closing costs for buying the property are part of your basis in the property and get depreciated. 

• Abstract fees.
• Charges for installing utility services.
• Legal fees.
• Recording fees.
• Surveys.
• Transfer taxes.
• Title insurance.
•  Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions.
• Re: Closing Costs and Title Insurance Credits: Credits received by the buyer from the seller get deducted from the basis.

The following are settlement fees and closing costs you cannot include in your basis in the property. 

1. Fire insurance premiums.

2. Rent or other charges relating to occupancy of the property before closing. 

3. Charges connected with getting or refinancing a loan, such as: 

    a. Points (discount points, loan origination fees), 

    b. Mortgage insurance premiums, 

    c. Loan assumption fees, 

    d. Cost of a credit report, and 

    e. Fees for an appraisal required by a lender. 

4.  Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. 

Related information:

• Where do I enter income and expenses from a rental property?