I purchased my house in 2019 with a loan and later did a refinancing in 2021, then I rented my house in 2022 for the first time as a vacation home. (We only rented like half a year, then we moved back)
My question is how can I deduct the closing cost of my loan and my refinancing loan?
I read this from TurboTax Forum
- Cost related to the acquisition of the loan are amortized (not capitalized) and deducted (not depreciated) over the life of the loan.
- Cost related to acquisition of the property are added to the cost basis of the property. They get capitalized and depreciated over time.
My question about the closing cost deduction for the loan of purchasing my house
Since I rented my house as a vacation home, can I use the same rules above to do the deduction for the loan of purchasing my house?
My question about the closing cost deduction for the refinancing loan
For the refinancing loan, my understanding is that its cost does not add to the cost basis of the property
- Should I amortize the whole cost?
OR - Should I only amortize the cost related to the acquisition of the loan and ignore the cost related to acquisition of the property?
OR - My understanding is wrong
Thanks!
