Closing cost to refi rental added to basis?

[AZ-Tax]

Client refi rental. I would think any real estate taxes would be a current exps (no pts and/or org fee with this refi) and most everything else would be added to the basis of the rental. Sound correct?

[Gretel]

I am a little puzzled why real estate taxes come into play with a refi. Never have seen this.

All other costs should be loan costs to be amortized over the life of the loan. Unless refi is with same lender.

[gkaiseril]

If the RE taxes are payments to an escrow account, they should not be considered until the actual taxes are paid form escrow.

[BP.]

why real estate taxes come into play with a refi. Never have seen this.

Have seen them on the HUD-1 if the taxes are past due at time of refi- they get paid from loan proceeds.

[AZ-Tax]

Correct and correct....

Gretel one would think RE taxes on a refi would be current but there is a possibility the owners was not current. In that case the lender most likely would have required the owner to be current. Gkaiseril is also correct if that was the case.

Thanks for your help professional preparers....

[Gretel]

Thanks for explaining about RE taxes. Helps me not to ask stupid questions if a client comes in with this.