Bear with me please, while I re-hash old news. 🙂
Property acquisition costs "are" included in the cost basis of the property and depreciated over 27.5 years.
Loan acquisition costs are "not" included in the cost basis of the property. They are entered as their own physically separate asset which is amortized and deducted (not depreciated) over the life of the loan.
the way I entered the acquisition financing costs was to include them together with the purchase price and other loan closing costs as the original basis for the property and that combined amount has been being amortized over the 27.5 year useful life of a rental property ever since.
I think you meant to say "that combined amount has been being Capitalzed/Depreciated over the 27.5 year useful life " I'm highly confident you have not been amortizing anything over 27.5 years, but have been depreciating it over that time.
If your loan acquisition costs are "NOT" listed as a separate asset, regardless of weather they're being incorrectly depreciated, or correctly amortized/deducted, then there's really no way to separate them out from the asset being depreciated over 27.5 years. So basically, you have no separate loan acquisition costs remaining to be deducted in the year of the sale.
TO see if this is worth the time/expense of fixing, in what year did you acquire the property, and what were your "loan" acquisition costs? (If you know the loan acquisition costs, you don't have to prove them to me. But if queried by the IRS, you may have to prove it to them.)
Overall, this seems to me to be fixable "as is". But depending on the costs involved, it may or may not be worthwhile on the tax front.
