Thank you very much Mindy, that was very helpful!
I have another question related to the depreciation of remaining finance fees.
-2012 refinanced GMAC loan with GMAC: When I edit this asset to indicate i have converted to personal use it states I have $474 of refinance fees from my prior loan which can be used as an expense this year as long as the new loan was not with the same bank. What do I do with the $474 since the refi was with the same bank as the original loan?
-2015 I refinanced the loan (GMAC became Ocwen) with Capital One. When I edit this asset do the remaining refi fees get used as an expense since it was a different bank?
Here are the instructions from TurboTax:
Remaining Refinance Fees with the Same Lender
Charges paid by a borrower to get a mortgage refinance for a rental must be amortized over the life of the loan. In the year you refinance to a new loan (and retire the prior loan), any existing refinance fees from any prior refinances become an expense unless the mortgage is financed with the same lender. If you used the same lender for the refinance, the unamortized fees on the first loan must be deducted over the term of the new loan.
How Do I Do This in TurboTax?
Points and other mortgage refinance fees are entered in the same area of interview where you track the depreciation of your rental property, or rental furnishings. Go to the Asset/Depreciation topic and select the new loan fees you entered for your new loan. Add the remaining fees to the cost of the new loan fees.
Does this last statement in bold mean I add the $474 from the first refi to the second refi and then all of that amount gets used as an expense?
Thank you!
