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rental refinance

I had financed a rental property. I had incurred loan origination and misc fess for about $2000 and was amortizing them over the 30 year loan.

Last year I refinanced the loan. The loan was essentially no cost as the rebate I got from the lender, cancelled the other fees incurred (lenders title, escrow, appraisal etc.

I have the following questions:

  1. How should I treat the remaining cost of the original loan (say 00 remaining of the original 00)

  1. How should I treat new refinance, the cost of which is under 0?

Thanks

Reply to
propMgr
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  1. Per my logic, the cost is amortized over the life of the loan. But the original loan is paid off. So you deduct the remaining points/amortization right away. The cost of the new loan will be deducted over the life of the new loan, but as you say these costs are zero.
  2. One sec, was the cost zero or a small number like 0. I think the official answer is deduct that small amount over the life of the new loan, but as it is so small, you can probably get away with deducting it all at once. They said there will be fewer IRS agents because of sequestration :)
Reply to
remove ps

You can only deduct the remaining cost from the first loan if the refinance is with a different lender. If the refi is with the same lender, you continue to amortize them over the life of the new loan.

Ira Smilovitz

Reply to
ira smilovitz

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