Richcpaman Posted February 16, 2018 Report Share Posted February 16, 2018 Client owns building and paid points and costs to secure the loan. Client pays off loan in 2017. There is unamortized points of about $3,000. Are these now deductible since the loan was paid off? This is not personal residence or home mortgage, a straight building loan. Used in the active conduct of their business if that makes any difference. Rich Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted February 16, 2018 Author Report Share Posted February 16, 2018 Also... This was new to us, and we carried over the amortization treatment of the points, they should have just gone to the basis on the building anyway, correct? Rich 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted February 16, 2018 Report Share Posted February 16, 2018 I would not add loan costs to a building, I would amortize them, if for no other reason than a shorter write off period. And when the loan is paid off, I would write them off since the loan is gone. But don't ask me for a code section! 2 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 16, 2018 Report Share Posted February 16, 2018 Rich, this should fall within sec 461 that requires that prepaid interest be deducted ratably over the loan's term for those taxpayers reporting on the cash basis. The allowance for homeowners paying points on the original purchase is the exception. There's a rev rule that deals with the ratable deduction for those using accrual basis. 1 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 16, 2018 Report Share Posted February 16, 2018 Adding to my post above, I agree with Abby that I'd write off any remaining points in the year of the loan's payoff. 1 Quote Link to comment Share on other sites More sharing options...
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