Bridge Loan Points : Unamortized Part Tax Treatment

[Zhenyang Jin]

Last April, I used one bridge loan to purchase one apartment. The loan costs are: $11K ( Processing fee: 1K + Points $10K). The loan term is 18 months.

In Nov 2025 (7 months later), I refinanced with another lender using tradditional commercial loan. 

Question: Instead of amortizing these loan cost, can I fully deduct this $11K loan cost because the original loan is paid off? Can I deduct the cost as interrest?

Regards, Clark

[Michael Plaks]

Quote from @Zhenyang Jin:

Last April, I used one bridge loan to purchase one apartment. The loan costs are: $11K ( Processing fee: 1K + Points $10K). The loan term is 18 months.

In Nov 2025 (7 months later), I refinanced with another lender using tradditional commercial loan. 

Question: Instead of amortizing these loan cost, can I fully deduct this $11K loan cost because the original loan is paid off? Can I deduct the cost as interrest?You amortize it 

Normally you would amortize it and then deduct the remaining unamortized costs at refinancing. Since it happened in the same year, it's more in the grey area, and the treatment will depend on your CPA. But deducting it as interest is incorrect either way.