I refinanced my rental in March but converted to personal use in June. Do I need to allocate points to both rental and personal? How should I handle the fees, etc?
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New Member

I refinanced my rental in March but converted to personal use in June. Do I need to allocate points to both rental and personal? How should I handle the fees, etc?

I am confused on how to handle the refi asset depreciation/amortization.  I entered all the fees including points and indicated it was 25% business use (90 days of 365).  TT took 25% of total costs and amortized over life of loan. But then under tax credits for personal use, not sure if I enter 75% of points there or say I didn't pay points?
3 Replies
Level 15

I refinanced my rental in March but converted to personal use in June. Do I need to allocate points to both rental and personal? How should I handle the fees, etc?

I think you're mis-understanding questions like the "percentage of time used for business" and the "percentage of personal use".

See if the below helps you to understand. It's written for someone converting personal to rental, but it should help clear things up for you so you enter the correct figures and make the correct selections for converting from rental to personal. The fact you did a refi should not change anything, and you shouldn't have to do any math on your own. The program should do all of it for you, based on your figures.

Rental Property Dates & Numbers That Matter.

Date of Conversion - If this was your primary residence before, then this date is the day AFTER  you moved out. If it was a rental before, then it's one day after the last renter moved out.
In Service Date - This is the date a renter "could" have moved in. Usually, this date is the day you put the FOR RENT sign in the front yard. Doesn't apply if coverting to personal use.
Number of days Rented - the day count for this starts from the first day a renter "could" have moved in. That should be your "in service" date if you were asked for that. vacant periods between renters count also PROVIDED you did not live in the house for one single day during said period of vacancy. If converting to personal use, the "days rented" count starts on Jan 1 of the tax year.
Days of Personal Use - This number will be a big fat ZERO. Read the screen. It's asking for the number of days you lived in the property AFTER you converted it to a rental. I seriously doubt (though it is possible) that you lived in the house (or space, if renting a part of your home) as your primary residence or 2nd home, after you converted it to a rental.
Business Use Percentage. 100%. I'll put that in words so there's no doubt I didn't make a typo here. One Hundred Percent. After you converted this property or space to rental use, it was one hundred percent business use. What you used it for prior to the date of conversion to rental, or after the date of conversion to personal use, doesn't count.


Returning Member

I refinanced my rental in March but converted to personal use in June. Do I need to allocate points to both rental and personal? How should I handle the fees, etc?

I have this same question.  We refinanced in March and rented it in converted it to rental mid May.  Just to clarify, we say “yes we refinanced this property in both places, under rental and under personal use?"

 

Returning Member

I refinanced my rental in March but converted to personal use in June. Do I need to allocate points to both rental and personal? How should I handle the fees, etc?

I added up the individual interest charges for the perspective periods and entered them separately. Please help clarify this…you say it does the math auto matically, but it failed to take the depreciation.  I am looking at having to manually enter this… as it was not the first year we rented the property.  I’m looking for the nuts and bolts answer.  I’ve entered things accordingly, and looked through prior threads.  

 

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