Prepayment penalty when selling rental

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  • origun
    Senior Member
    • Mar 2008
    • 217

    #1

    Prepayment penalty when selling rental

    Client sold his rental with a significant gain. He had a prepayment penalty of about $10k which was paid out of proceeds to lender. Can the penalty be considered a selling cost and therefore used to reduce gain?
  • taxea
    Senior Member
    • Nov 2005
    • 4292

    #2
    yes it can...possibly even as interest--need to look it up in Pub 17
    Believe nothing you have not personally researched and verified.

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