What would be the net sales price for the sale of "unrealized refinancing fees points paid at closing" related to my rental property?

[tax-me-senseless]

I closed an amortized asset in my rental property which were points I had paid at closing for the original mortgage. The remaining amount of this asset was transferred as a miscellaneous expense on schedule E, which I am declaring as as a lump sum for tax year 2021. When this transferred from my federal return to my PA state return, this "expense" is listed in the gain/loss section. It shows me the cost basis, which is the amount I am expensing when this asset was closed, but it is asking me to enter the "net sales price" for this capital expenditure. What do I enter for the net sales price?

[AmyC]

If you qualify to deduct the points, then the sales price is zero.  If you paid off the loan, you may be able to write them off. However, if you refinanced, that is not the case.  Publication 527, Residential Rental Property (Including Rental of Vacation Homes)

[tax-me-senseless]

Thank you for your response. I did have some follow up information. These points I amortized and moved to an expense are for the original mortgage. I did qualify to do that. I did refinance in 2021with a different lender. This sale I am referencing is for those original mortgage points I amortized and then moved the remaining amount to an expense. How would this  information affect the the net sales price? Thanks. 

[MarilynG1]

Your unamortized points claimed as an expense on Schedule E should not affect the Net Sales Price, only the Net Rental Income for the year. 

Click this link for more discussion on Expensing Amortized Points.

[tax-me-senseless]

Thanks for helping, but I am still confused. What is happening is that Turbo tax is transferring this asset I closed in my rental section on my federal return over to my Pennsylvania State return, and is including it as a loss in my gains and loss section. It includes this in the same section where I had a capital gain from some stock I sold. This rental expense seems out of place here. The PA Turbo tax software is asking me to "enter or verify the following information for this capital gain/loss." It provides the cost basis, which is the amount of the asset that I closed and moved to an expense, and then it asks for the "net sales price." Again, this asset was points I had paid on my original rental property mortgage that was being amortized over 30 years, but when I refinanced with a different lender, I moved it to an expense for 2021. I don't know why this is considered a capital loss? Any suggestions? Thanks 

[MarilynG1]

If you don't want to show a Gain or Loss on your Pennsylvania return, I would suggest entering the 'net sales price' the same amount as the 'cost basis', since the asset is showing neither a gain/loss in your Federal return (it's a Rental Expense). 

You could contact the Pennsylvania DOR if you want more clarification.