Where do I enter refinance information for a rental property?

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Chris
Chris Member Posts: 3 Newcomer
I have deducted mortgage re-financing fees on my rental property since 2013. Previously I used Tax Act. I tried entering these fees as a depreciable asset but I cannot match the amount that Tax Act shows as the depreciation for 2023.

On TaxAct I was using SL(straight line), 30 years, Full Month, but on FreeTaxUSA I get errors about the Depreciable Life or MACRS is incorrect. It seems also that regarding MACRS, there is no Full Month option. I am stumped.

How can these 2 programs be so different about depreciation? Or better, am I entering this in the wrong area?

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  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 247
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    Hi,

    When you need to depreciate/amortize loan costs, use the following.

    • Alternative Depreciation System (ADS)
    • 30 Years or the life of the loan
    • Mid-month

    When you look at your depreciation schedule, please note that the ADS is actually Straight Line (SL) and should be the same as the other company.

Answers

  • Chris
    Chris Member Posts: 3 Newcomer
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    Hello,

    Thanks! I should have written 15 (life of loan) instead of 30, however, it works!

    Do you happen to know if it matters what category I use Real Estate or Other?
    If I use:
    Other
    Amortizable Asset (Which type best describes your Amortization)
    Amortizable Asset Code Section- there is no code 163 (Financing Fees) but if I choose say 171, input the past amortization and life in years of amortization-I get the same result.

    I am not sure if it matters. But thanks again. I did not know that ADS is SL!

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 247
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    Hi,

    That would be the best option for loan refinancing fees, but we don't currently have the code. Sorry.

    Honestly it does not matter though.

  • Chris
    Chris Member Posts: 3 Newcomer
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    Hello,
    Great, that's what I supposed. But thanks again, it's the correct amount, and that's what important.
    I really appreciate it and now my I can go forward with FreeTaxUSA instead of TaxAct.