@jennifervphan
@AmeliesUncle
I want to go back and clarify some things. The closing statement @jennifervphan provided is dated 2021. You might be preparing a 2022 tax return or you might be planning for 2023. (Or did you place the home in service as a rental in 2021 and you are preparing a very late 2021 tax return?)
When was, or will, the property be placed in service as a rental? Was it used as your personal home before it was placed in service as a rental?
If we consider the mortgage points only, separate from any other fees, the points may be deductible on your personal schedule A as an itemized deduction in 2021, the year of the home purchase. Or, they might be amortized over the life of the mortgage. If you deducted the points in full on your 2021 schedule A, then you can’t deduct them again as a rental expense in 2022 or 2023.
If we consider other fees, like the bank processing fees and the bank (lenders) title insurance, my question for @AmeliesUncle is, are those fees allocable to the rental property on schedule E if the home was used as a personal home before being placed in service as a rental?
So before we go into too much more detail into which fees are includable as basis, and which fees might be property expenses on schedule E, I would like to clarify the timeline.
