rental cash out refinance

Mahesh

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Feb 5, 2012, 3:22:41 AM2/5/12

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I have single owner LLC (disregarded entity) that deals in rental
properties.

My LLC paid cash for a rental property (property A) acquired in
2009. In 2011, I pulled cash out of this property by financing it
using a loan. The cash was parked in a bank account owned by the LLC
and used for expenses the LLC incurred for managing rental properties
(property A and others). In 2012, the LLC bought another property
using the remaining cash pulled out of property A. I have the
following questions:

. Is the interest paid on the mortgage for property A tax deductible
on Schedule E?

. Are the costs incurred in the financing of Property A (origination
fees, lenders title/escrow, appraisal, recording fees) used to
increase the basis of the property or should they amortized over the
period of the loan (if so, where should it show up in schedule E)?

Thanks.

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Mahesh

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Feb 6, 2012, 3:05:08 PM2/6/12

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On Feb 5, 1:08 pm, "D. Stussy" <spam+newsgro...@bde-arc.ampr.org>
wrote:
> "Mahesh" <masht...@gmail.com> wrote in message
>
> news:12cbca82-1dac-4661...@h3g2000yqe.googlegroups.com...

>
> > I have single owner LLC (disregarded entity) that deals in rental
> > properties.
>
> > My LLC paid cash for a rental property (property A) acquired in
> > 2009. In 2011, I pulled cash out of this property by financing it
> > using a loan. The cash was parked in a bank account owned by the LLC
> > and used for expenses the LLC incurred for managing rental properties
> > (property A and others). In 2012, the LLC bought another property
> > using the remaining cash pulled out of property A. I have the
> > following questions:
>
> > . Is the interest paid on the mortgage for property A tax deductible
> > on Schedule E?
>

> Yes.

So is this an expense for property A or should this be listed as an
expense for other properties in Schedule C?

>
> > . Are the costs incurred in the financing of Property A (origination
> > fees, lenders title/escrow, appraisal, recording fees) used to
> > increase the basis of the property or should they amortized over the
> > period of the loan (if so, where should it show up in schedule E)?
>

> Amortized.

Do you know under what category should this show up on Schedule C?
Would it be Mortgage Interest?

Thanks.
>
> --

Thanks

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Mahesh

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Feb 8, 2012, 5:10:52 PM2/8/12

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>
> > So is this an expense for property A or should this be listed as an
> > expense for other properties in Schedule C?
>
> > > > . Are the costs incurred in the financing of Property A (origination
> > > > fees, lenders title/escrow, appraisal, recording fees) used to
> > > > increase the basis of the property or should they amortized over the
> > > > period of the loan (if so, where should it show up in schedule E)?
>
> > > Amortized.
>
> > Do you know under what category should this show up on Schedule C?
> > Would it be Mortgage Interest?
>

> Why would you be using Schedule C for this? It all goes on Schedule E.

Sorry, I meant Schedule E.