First year partial rental in 2022 with refinance in 2020

[gshforever]

My case:

• Bought a condo in 2016 as my primary with lender A.
• Refinanced with lender B in 2020.
• Started renting it out on 09/15/2022 (moved to a new condo).

Question: How to treat the cost of the original mortgage and the refinance? 

• Should both mortgage costs (title-related costs, attorney fees for each time, origination charges/application fees, recording fee, etc, all happened twice) be added together when it comes to the cost base?
• If not, which one is to be treated as amortized, and how treat the other one? Expense vs amortized?
• How to do in Turbotax? See nowhere to enter refinance cost.

Thanks

[RobertB4444]

Your basis in the condo that you are depreciating is what you paid for it.  So you paid your initial payment and the initial closing costs with lender A.  You also paid any major improvements that you made as well as your refinance costs with lender B.  All of this should be added together to be the basis (what you paid for the condo) when starting it as a rental in 2022.

You need to save the records - the initial purchase and the refinance and any receipts for major improvements - and then start the depreciation.  You'll depreciate it over 27.5 years and when you sell the place any depreciation that you have taken will be taxed as regular income.  

If you were to refinance the condo again while it was a rental the refinance costs with lender C would create an entirely new asset which would be depreciated at 27.5 years as well.  As would any improvements or renovations that you make now that it is a rental.

@gshforever