refi fees would be amortizable over the life of the mortgage so part was deductible in 2020.
At first, I was going to disagree with this. Double-checked myself with IRS Pub 936 pages 5, 6 and 7 at https://www.irs.gov/pub/irs-pdf/p936.pdf.
From what I understand, the borrower has a choice here. However, depending on the choice selected certain criteria may have to be met as outlined in Pub 936.
So if the borrower meets the conditions to amortize, then I'd recommend they go ahead and amortize applicable costs over the life of the loan. Now for the repetitive stuff for others reading this thread.
- Expenses incurred for acquisition of the loan are amortized and deducted over the life of the loan. Examples of this include property survey costs if a survey is required as a condition of loan approval, as well as loan application fees.
- Expenses incurred for acquisition of the property are added to the cost basis of the property. Examples of this include transfer fees paid at the courthouse to transfer ownership from the seller to the buyer. These fees are sometimes called tax transfer fees, document fees, tax stamps or document stamps.
