Rental Property Deduction. Schedule E?

Question

My client has a rental property and he refinance the property and paid loan fees and closing cost . Can I deduct these expenses on Schedule E? thanks

Answer 1

They are not taken as a deduction in the year of purchase. They are either depreciated or amortized.

If the closing costs are related to the property, they are added to the basis of the property and depreciated.

If the closing costs are related to the loan, they are amortized over the life of the loan.