how do I take care of the old depreciation of the refi costs?
First, some clarification here.
Financing cost are not capitalized and depreciated. They are amortized and deducted over the life of the loan.
Now if you refinanced with the same lender, you can NOT fully deduct your cost of the old mortgage. You can just leave it alone and let it continue to amortize and be deducted over the life of that original loan.
If you refinanced with a NEW lender, then those costs are fully deductible in the tax year of the refi. To deduct those old costs (I am assuming you entered them correctly at the time you took out the old loan), in the Assets/Depreciation section elect to EDIT that item and start working it through.
On the screen "Did you stop using this asset in 2020?" select YES.
For date of sale enter the closing date of the new loan, and continue.
on "Special Handling Required?" click YES.
On "Depreciation Deduction Amount" select "Transfer these fees for me to other expenses", then continue.
That does it. The remaining financing fees will be transfered to the "Miscellaneous Expenses" part of the Rental Expenses section. If you want to confirm it, just work through the rental expenses section and on the last screen you'll see them clearly labeled and entered there as a deduction.
