See https://turbotax.intuit.com/tax-tips/home-ownership/mortgage-refinance-tax-deductions/L2fzA7hg5
Note that there are various costs and expenses that you may incur that are not deductible prior to placing your property in service as a rental.
@wleuter wrote:
- 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.
That was written by someone who has an imperfect understanding of cost recovery for the purposes of federal income taxation. Adding costs to the basis of property is capitalizing those costs. Amortization generally is applicable to intangible assets while depreciation applies to tangible assets (otherwise the principle with respect to both is identical).
