Refinancing rental property with existing amortization

[natek3232]

I refinanced a rental property 5 years ago with a 30 year loan. I have been deducting the costs of that refinance over a 30 year schedule. What happens to the remaining amount (25 years of costs) that have not yet been deducted if I refinance again now? Do I get to deduct all of the remaining costs of that original refinance this year, and then deduct the costs of the new refinance over a new schedule?

[Anonymous]

You are correct. the remaining balance of the refi costs of the old mortgage get written off in the year of the refi.  the refi points get amortized over the life of the new mortgage.  if any portion of the refi was used to substantially improve the main residence, they can be written off immediately. 

[Carl]

What happens to the remaining amount (25 years of costs) that have not yet been deducted if I refinance again now?

Actually, it depends.

If you refinance with the same lender, the remaining fees on the original loan are added to the fees of the new loan, and the total is amortized (not capitalized) and deducted (not depreciated) over the life of the new loan.

If you refinance with a different lender, then the remaining amortized costs of the old loan are deducted in full immediately, and the fees on the new loan get amortized and deducted over the life of the new loan.