Points -> write off or expensing remianing balance

[ILLMAS]

I have TP that paid points in a refinance in 2004, his loan was for 15yrs, so I amort the points over the life of the loan, now in 2008 he refinanced again and paid points for the same commercial property, how do I expense the remaining points from 2004? It's not a sale nor abandonment. Same questions goes for the refinancing cost paid in 2004, I also amort over the life of the loan.

Thanks,

[RoyDaleOne]

Expense the remaining unamortized balance from 2004 in 2008, under other deductions -- Write-off of remaining unamortized loan cost -- is a good description.

Start amortizing the 2008 loan costs as of the date of the loan over the term in the note payable documents.

Loan costs 5,000.00 credit

Accumulated amortization 1,333.33 debit

Write off 3,666.67 debit

New loan costs 5,000.00 debit

Loan payable 5,000.00 credit (This enter should be or was part of the new loan recording.)

Amortization Expense 666.67 debit

Accumulated Amortization 666.67 credit

Sorry about the detail entry I just don't want to come back, and it is a heck of a lot quicker this way.

[grandmabee]

Expense the remaining unamortized balance from 2004 in 2008, under other deductions -- Write-off of remaining unamortized loan cost -- is a good description.

Start amortizing the 2008 loan costs as of the date of the loan over the term in the note payable documents.

Loan costs 5,000.00 credit

Accumulated amortization 1,333.33 debit

Write off 3,666.67 debit

New loan costs 5,000.00 debit

Loan payable 5,000.00 credit (This enter should be or was part of the new loan recording.)

Amortization Expense 666.67 debit

Accumulated Amortization 666.67 credit

Sorry about the detail entry I just don't want to come back, and it is a heck of a lot quicker this way.

remember if it is the same lender you have to keep amortizing both loans, also if you do improvement to the property with the new loan you can write off the points for that portion.

[ILLMAS]

So on Sch E, I will expense the remaining "points 2004" and "refinancing cost 2004" under other expenses, this TP paid 7K in points amortized over 15yrs, the remaining balance is about 6K, the remaining on the refi cost is about 2K. Then I would just delete the two assest entries? I don't think the disposition applies to these entries because it's not a sale or abandonment.

Thanks

[RoyDaleOne]

I agree with your treatment of the remaining loan costs.

[Julie]

In ATX, if you've been using the loan amortization checklist, all you have to do is check the box that the loan was paid off this year.