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Hello,

I am getting set to refinance the mortage on our former house -- now a Rental property. I have a question for the experts out there. I have searched on this board for the answer, and if I missed it, I apologize.

What items, if any, are deductible in conjunction with the refinance?

- Points?
--- are they subject to the same rules as a primary residence (i.e. must be spread out over the term of the loan)
- Fees?
- etc?

Thanks in advance,

Joe
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What items, if any, are deductible in conjunction with the refinance?

Immediately deductible? Nothing, other than the interest that is prorated on the two loans. OK - any property taxes that might be paid through the closing process would be deductible also.

Pretty much everything else must be amortized over the life of the loan.

And a bonus caveat: If you get cash out of the refinance, all of your interest expense on the loan might not be deductible. It will depend on how the proceeds are used.

--Peter
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Re: deductible expenses--what about the undeducted portion of pro rata points from previous purchase/refinance?
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what about the undeducted portion of pro rata points from previous purchase/refinance?

Those would also be written off when a loan is refinanced and paid. Good point.

--Peter
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Re: deductible expenses--what about the undeducted portion of pro rata points from previous purchase/refinance?
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Since the old loan is now paid off/refinanced those undeducted points are now deductable.

cat
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Thank you for your answers. I was hoping that there would be some obscure bits of knowledge that would be beneficial.

Alas, no such luck.

Thanks again,

Joe
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