michaelmars Posted February 10, 2012 Report Posted February 10, 2012 what code do you use when amortizing refi costs? they are not just points but also legal, title and other charges. Quote
jklcpa Posted February 11, 2012 Report Posted February 11, 2012 Use code sec 461 for the points. The other charges are added to basis. If it's rental property, then those costs are depreciated over the appropriate life depending on whether it's residential or commercial property. Quote
michaelmars Posted February 11, 2012 Author Report Posted February 11, 2012 They are not added to basis on a refi, the are amortized over the life of the mortgage, i just know what code to use, i have always just lumped it with the 461 code but was wondering if there was another to use Quote
jainen Posted February 11, 2012 Report Posted February 11, 2012 >>They are not added to basis on a refi, they are amortized over the life of the mortgage,<< Says who? Maybe the reason you can't find a code section is because there isn't any. Maybe they must be capitalized, like other intangibles. But adding them to basis does NOT make intangibles depreciable property. Even assuming a business purpose for the new loan, maybe intangibles are just going to sit there on the balance sheet until the company is sold. Quote
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