Refinance fees from prior refinances

[riccaev]

I refinanced my rental property in 2019 and again in 2020.  I entered the new refinancing information but am having trouble figuring out under "Depreciation Section in Rentals" to "dispose of" the old refinance fees. (There is no option for "dispose of")  Where exactly do you enter this information?

Then how do you calculate the unused portion of the old (2019) refinance fees and enter under "Other Expenses"? 

Plus, I just realized when I refinanced in 2017, I never "dispose of" those old refinance fees in 2019.  Oops, and not what?

Please help!!

[ColeenD3]

Please see this answer from DianeW.

• Loan or mortgage ends.    If your loan or mortgage ends, you may be able to deduct any remaining points (OID) in the tax year in which the loan or mortgage ends. A loan or mortgage may end due to a refinancing, prepayment, foreclosure, or similar event. However, if the refinancing is with the same lender, the remaining points (OID) generally are not deductible in the year in which the refinancing occurs, but may be deductible over the term of the new mortgage or loan.  Simply divide the total or adjusted amount by the number of months of the life of the loan.  This needs to be tracked until the loan is paid off.

[Goldenage]

This doesnt answer the "How to Dispose" part of the question.

[CharlesX]

"If the mortgage is financed with the same lender, the unamortized fees on the first loan must be deducted over the term of the new loan."

how to do it in TurboTax? 

[PatriciaV]

Closing costs (including refinancing fees) for a refinanced loan for Rental Properties are added to the cost basis for the property. You may report this total as another asset for amortization under Rental Real Estate Assets. Choose Rental Real Estate for the type of asset, then "Amortizable Intangible" on the page titled "Tell Us a Little More." (Mortgage refinance costs are listed in the examples for this type of asset.) The Code section is 163: Loan fees, refinance costs. The amortization period would be the term of the new loan (default is 15 years).
 

Note that when you refinance your main home or a second home for personal use (such as vacation property or a cabin), you can only deduct points over the life of the loan and not refinance fees. 

[bwoirhaye]

Same question as above.  How do I change the depreciation schedule for the old loan's fees over the life of the new loan?  

[RobertB4444]

Add the loan fees to the cost basis and they will be depreciated along with the property.

@bwoirhaye 

[bwoirhaye]

@RobertB4444   Turbotax says that, for loans which are "refinanced with the same lender, the unamortized fees on the first loan must be deducted over the term of the new loan".  It wouldn't be the right schedule to do that with the rest of the property.

[RobertB4444]

In that case @PatriciaV has detailed how to create a new asset for the unamortized fees above.  Just make sure that the period for depreciation is the period of the new loan since the system will default to 15 years and that may not be correct for you.

@bwoirhaye