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April 10, 2022
Question

I refinanced my rental property in 2021 and the refinance charges were all rolled into the loan (I did not write a check) are these fees still tax deductible this year?

  • April 10, 2022
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Carl11_2
Employee
April 10, 2022

From what I read in IRS Pub 527 at https://www.irs.gov/pub/irs-pdf/p527.pdf beginning on page 4, "Types of Expenses", the first thing covered is points.  I find nothing that says you can't deduct/claim them over the life of the loan.

It can be tricky to enter into TurboTax. So here's the general guidance.

ENTERING POINTS

here's how to enter the points in the Assets/Depreciation section.. (does not apply to entering the property itself, or any other property assets.)
- Select the Add and Asset button. (go straight to the asset summary if presented that option)
- Select Intangibles/Other Property, then continue.
- Select Amortizable Intangibles, then continue.
- Describe it as something like "2021 Financing Fees".  Then enter the amount, and the closing date of the loan. Then continue.
- Select "purchased new", then "100% business use", enter the closing date of the loan (again), then continue.
- Code section is 163:Loan Fees, then continue.
- Useful Life in Years is the length of the loan, then continue.
- You can "show details" if you like. Then continue, and that does it