Starting on 1/1/2019, the rental was converted to full 100% rental. I added three new assets including 30% of land, 30% building, and 30% of loan cost and placed them in service on 1/1/2019 without thinking too much. The original loan is a 30-year loan.
If I'm understanding correctly, then it sounds like you converted the remaining 30% correctly. But for the amortized loan costs on that 30%, they should be set up to be deducted over the 'remaining" life of the loan, which would be 25 years. If you didn't do that, then leave well enough alone, and keep reading, as it's going to "work out in the wash" anyway.
The rental was refinanced in 2021 with a different lender. I will deduct unamortized loan cost on 2021 return.
Your terminology is unclear and I suspect you're just using the wrong terminology. I think what you mean is "I will deduct remaining amortized loan cost on 2021 return". If I'm understanding correctly, then I agree. But I'm going to re-state in my way, to confirm and ensure we're on the same page.
Since you refinanced with a different lender in 2021, any and all remaining amortized loan costs to be deducted on the old loan, are now fully deductible in the year you refinanced. Here's how to do that in TurboTax, assuming you entered them correctly as an amortized asset to begin with.
DEDUCT FINANCING FEES OF OLD LOAN WHEN REFINANCING
In the Assets/Depreciation section for that rental property, elect to edit/update the entry for your amortized loan costs (sometimes referred to as points, or origination fees).
- On the "Review Information" screen click Continue.
- On the "Did you stop using this asset 2021?" screen, click YES.
- On the "Disposition Information" screen, in the disposition date box enter the date you closed on the new loan. Then click Continue.
- On the "Special Handling Required?" screen, click YES.
- On the "Depreciation Deduction Amount" screen, select Transfer These Fees For Me To Other Expenses. Then click Continue.
You'll see the remaining fees of the old loan to be deducted in the Rental Expenses section, very last screen of that section. The entry will start with "Unrealized Refinancing Fees...."
