can original loan and 3 refinancing costs be added to cost basis when rental property is sold

[ColeenD3]

These would be yearly deductions on Schedule E. Any balance at sale is deductible.

The costs associated with obtaining a mortgage on rental property are amortized (spread out) over the life of the loan. For example, if it cost you $3,000 to refinance your 30-year mortgage, you'd be able to deduct $100 per year for the next 30 years.

Other refinance-related expenses not directly related to the mortgage may also be deductible. Generally, if the cost is associated with operating the property (like real estate taxes or hazard insurance) they're deducted as expenses, whereas costs associated with purchasing the property (like title search fees or recording fees) are added to the property's cost basis, which means they get depreciated.

Please see this additional information from PattiF.

Go to Your Property Assets page- Along with your rental, you should see your original refinancing fees and the depreciation amount.

• Select Edit. Continue through page descriptions of prior fees. Check box, the item was sold, retired or disposed of and the date of your new fees as the date sold.
• Continue to Confirm your Prior Amortization page.
• Select Yes on the Special Handling Required page, because the last option is true.
• Continue to next page and select radio button Transfer these fees for me to Other Expenses. View Sch. E (page 1) in forms mode to verify remaining depreciation and transfer to Other Expenses.

End result: Current depreciation amount for old loan. Remaining unamortized balance to be transferred to other expense line. Your old fees may still show on the asset page if you still have some depreciation for the current year, but it will not be listed there in the next year

 Add your  New Loan Fees as a new asset. On the Your Property Assets page, click Add an Asset link to enter data for new loan fees.

[Carl]

- Costs associated with acquisition of the property are added to the cost basis of the property in the tax year the property is acquired.

- Costs associated with acquisition of the loan are amortized and deducted over the life of the loan.

Therefore, your property acquisition costs "should" already be included in the cost basis and require no action on your part.

The loan acquisition costs "should" have been entered as such in the tax year you closed on the purchase of the property.

When you sell the property, any remaining amortized costs to be deducted, are fully deductible in the tax year you close on the sale. Assuming things were entered correctly in the tax year you purchased the property, here's how to deduct the remaining amortized costs in the tax year you sell the property.

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 points.

- 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...."

[Mike9241]

the loan itself does not add to basis. 

if you bought property for$100,000 and got an $80,000 loan your tax basis is $100,000

if you refi for $120,000 your tax basis is still $100,000

if you  use the cash out for improvements that cost of the improvements adds to basis and needs to be depreciated,

if you spent the cash out for repairs and maintenance those are deductible expenses but do not add to basis.

if you used the cash out for personal purposes the basis isn't affected.

[BAM62]

I see I wasn't clear on what I was asking.  I should have said closing costs and not original loan.  Also, the three  refinances were done when we used it as a second home and before we turned it into a 100% Vrbo rental in 2014. So, can appraisal costs and other settlements costs of the refinancing be added to the cost basis as we sold it in 2021.

[RobertB4444]

Yes, but be careful. 

Any mortgage interests or taxes that were part of the closing costs on any of the refinances were deductible in the year that you refinanced, not now.  Make sure to back those out. 

The rest of the closing costs should have been amortized over the life of the loan but if they were not they should be added to your basis for the sale.