The use of mortgage debt to finance an income property
investment has certain tax consequences. For example, up-front
financing costs for investment properties are not fully deductible
in the year in which they are paid. Instead, they must be amortized
over the life of the loan. If up-front financing costs on a 30-year
loan total $6,000, what is the maximum amount per year that the
investor can deduct when calculating taxable income from rental
operations? (Assume that there is no prepayment on the loan.)
$2,400
$6,000
$100
$200