Where to I input the information if I refinanced a rental property?

Forum|Forum|6 years ago
June 1, 2019
3 replies
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Do I just add an expense line and enter the information? Are all the closing costs deductible?

TurboTax Self Employed Online

Best answer by Irene2805

Because this is a rental property the closing costs listed on your HUD-1--loan fees, title fees, and recording fees,etc--are capital expenses. You may amortize them over the life of the mortgage.

Turbotax will do all the work. The program will ask if you refinanced your property and then create an asset for your refinancing fees. To enter your refinancing fees, please follow these steps:

Click on the Business tab > Continue > I'll choose what to work on
In the Rental Properties and Royalties section, click the Start/Update button. [See Screenshot #1, below.]
If you have already started adding information about your business, you will be asked if you want to review your rental and royalty information. Click the Yes box.
When you come to the Rental and Royalty Summary screen. Click on the Edit box next to the property. [Screenshot #2]
On the Review Your [address] Rental Summary screen, in the Expenses section, click on Start/Update. [Screenshot #3]
You will come to a screen, Did You Refinance? Mark the Yes radio button and click Continue. [Screenshot #4]
Continue through the screens, entering the requested information.
TurboTax will create an asset, "2016 Refinancing Fees," which you can review in the Assets section of the Rental Summary Screen. [Screenshot #5]

Irene2805Answer

Because this is a rental property the closing costs listed on your HUD-1--loan fees, title fees, and recording fees,etc--are capital expenses. You may amortize them over the life of the mortgage.

Turbotax will do all the work. The program will ask if you refinanced your property and then create an asset for your refinancing fees. To enter your refinancing fees, please follow these steps:

Click on the Business tab > Continue > I'll choose what to work on
In the Rental Properties and Royalties section, click the Start/Update button. [See Screenshot #1, below.]
If you have already started adding information about your business, you will be asked if you want to review your rental and royalty information. Click the Yes box.
When you come to the Rental and Royalty Summary screen. Click on the Edit box next to the property. [Screenshot #2]
On the Review Your [address] Rental Summary screen, in the Expenses section, click on Start/Update. [Screenshot #3]
You will come to a screen, Did You Refinance? Mark the Yes radio button and click Continue. [Screenshot #4]
Continue through the screens, entering the requested information.
TurboTax will create an asset, "2016 Refinancing Fees," which you can review in the Assets section of the Rental Summary Screen. [Screenshot #5]

mjpb52

Thank You, for many years I have never utilized the step by step method. This year due to a conversion from vacation home to rental + refinanced, I was totally lost. (asset worksheet refinance expenses, etc) Appreciate the clarity and the step by step method to get there. Some people did a screen shot which was totally unreadable and found your answer.

lichg97

Does the "refinance" also include getting the mortgage for a new purchase?

Vanessa A

What type of new purchase? If you are purchasing a new house with the proceeds from the refinance, then no it does not count. In order for the mortgage interest to be tax deductible, the loan has to be used to buy, build or purchase the home in which it is secured by.

If you are taking out an original loan on a new home, then that would not be refinancing, that would be original mortgage.

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lichg97

Thanks. So is the fees (points, processing fees/appraisals) associated with obtaining the original mortgage for a rental property deductible (in the amortized way)?

Jualbers

Hopefully someone is still out there responding to questions.
If I purchased carpeting for rental property several years ago and recently replaced all the flooring, do I removed the Asset created for the carpeting because new flooring has been installed?

mjpb52

CARPET: Carpets are typically depreciated over 5 years. This applies, however, only to carpets that are tacked down. If the carpet is glued down (perhaps in a basement) then it becomes “attached” to the property and must be depreciated over 27.5 years. From Web;

Issue is as long as you are beyond the depreciated years than you don't have to recapture.

Critter-3

do I removed the Asset created for the carpeting because new flooring has been installed? Yes ... all assets that are disposed of need to be removed from the asset lists ... if it was simply trashed then the selling price is zero.