Hi, In 2008 we paid $7500.00 in prepaid loan cost (Third party expenses, such as appraisal, etc..) to a loan broker, to secure us a Fannie Mae refinancing loan for our residential rentals. Later on that national broker house went down and we lost the money without being able to do the refinancing. Should I treat this amount as a casualty or as a bad loan? Thanks.
Wouldn't this just be an expense on Schedule E?
I chose "None of the above". It's not a casualty loss and it never was a loan. It's a business expense - the same as it would be if Fannie Mae had rejected your application or you had found other financing.
Where you take the expense depends on how your rental business is setup and the types of returns you file.
Dick
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