Costs associated with acquisition of the property are added to the cost basis of the property and depreciated over time. Examples of such costs would be the title transfer fees paid at the courthouse to remove the seller's name from the title and replace it with the buyer's name.
Costs associated with acquisition of the loan are amortized and deducted (not depreciated) over the life of the loan. Expamples would include loan application fees as well as property survey fees provided a property survey was a requirement by the lender of loan approval.
Typically, loan acquisition costs (namely, points) paid at the closing on non-business property (your primary residence) are fully deductible in the year of purchase as a SCH A itemized deduction and can not be claimed again when you convert the property to a rental or any other type of business use. However, if you took the standard deduction in that year, (which is most likely) then you can claim your loan acquisition costs and amortize/deduct them over the life of the loan.
