Skip to main content
June 6, 2019
Solved

I'm selling a rental home. Can I capture refinance fees in cost basis when calculating capital gains?

  • June 6, 2019
  • 1 reply
  • 0 views

The house was my residence from 2004 to 2013, became a rental in 2013 to current sale in 2018.  I refinanced it twice while it was my residence.  Can I add the fees from those refinances to cost basis or use them anywhere to reduce my capital gains?  Thank you!

    Best answer by MinhT1

    Yes, these refinance fees can be added to the cost basis of your home.

    Costs added to basis. Certain expenses paid in connection with the purchase or refinancing of a home, regardless of when paid, are capital expenses that must be added to the basis of the residence. These include attorney's fees, abstract fees, surveys, title insurance and recording or mortgage fees.

    1 reply

    MinhT1Answer
    June 6, 2019

    Yes, these refinance fees can be added to the cost basis of your home.

    Costs added to basis. Certain expenses paid in connection with the purchase or refinancing of a home, regardless of when paid, are capital expenses that must be added to the basis of the residence. These include attorney's fees, abstract fees, surveys, title insurance and recording or mortgage fees.

    **Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"
    gingy72Author
    June 6, 2019
    I'd be adding it to my cost basis now (2018 tax year), changing the cost basis I established in 2013 when it became a rental.  Still ok?  
    March 15, 2022

    You are correct, under current tax law, fees for refinancing a mortgage are not included in your adjusted cost basis.

     

    Fees for refinancing a rental property are amortized over the life of the loan for a rental property.  

     

    If this is a personal property and not a rental property, refinancing fees are not at all deductible.

    **Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"