Loan Closing Costs

[Oh Baby!]

Client who has a LP, which owns a single property, refinanced a mortgage. It would seem to me that the closing costs from the original loan, which were being amortized, could be written off in full, now that the original loan is has been re-financed. Can anyone confirm or tell me otherwise.

Thanks.

[Lion EA]

My memory is saying it depends on whether it was the same lender (no) or different (yes), so wait for someone who knows or do further research.

[jklcpa]

Loan closing costs are part of basis, whether from an original loan or a refinance. When closing costs are from the original purchase, I add those in to the total cost of the property acquired and depreciate it as part of the building using whatever method and life is appropriate to that property and its use. I've never separated out original loan closing costs and amortized them as a separate item. I don't think you get to write them off, and I think the closing costs on the refinance add to basis also. I think they remain until the property is disposed of.

But like Lion said, do more research.

[Oh Baby!]

bumping this to the top to see if any others have any idea on how this should be treated. Thanks for your advice.

[Mr. Pencil]

bumping this to the top to see if any others have any idea on how this should be treated. Thanks for your advice.

You already got the answer from Lion. If the old loan was paid off, unamortized closing costs can be deducted UNLESS the refinance was with the same lender. In either case, new closing costs can be amortized as an intangible asset (assuming the refinance had a business purpose).