It depends. If you are talking about points only, then they can only be amortized over the life of the refinanced loan. If it was a different lender in the refinance, then you can deduct the full amount of any points from the original mortgage lender for the rental activity. If it was the same lender then any points charged on the first loan and the second loan must be added together and then amortized over the life of the refinanced loan.
Follow the steps below to add this asset for any points on the refinance for the appropriate outcome.
- Sign into your TurboTax Account > Search (upper right) > Type rentals > Press enter > Click on the Jump to .... Link
- Edit beside the rental you want to work on > Scroll to Assets > Edit
- Select Yes to go directly to the asset summary >
- Add or Edit the asset for the closing costs and or points > Select Intangibles, Other Property > Continue
- Select Amortizable intangibles > Continue > Enter the details about your costs including the refinance date
- Continue > Select the Code Section 163 for loan fees > Enter the useful life (number of months of the loan)
- The final screen will show the deduction.
- See the images below.
Notice the end result you want to see, the date the refinance began will have an impact in the first year.
If you are referring to mortgage interest and two forms 1098, due to the refinance, then use the instructions at this link.
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