Depreciating points on mortgage obtained prior to conversion

[Brian Ulrich]

I’m stating to prepare my taxes for the 1st time on our rental that was converted mid-year 2017 from a primary residence. Feeling good about just about everything except three fuzzy items:

1. Home was purchased in 2007 with a couple thousand in points paid for our initial mortgage (which we no longer have - has since been refi’d). Am I allowed to add those points paid for this asset to be depreciated over 27.5 years? It seems like I shouldn’t be able to, since we lived in it for 10 years before converting it, but thought I’d check!

2. We converted it 4/1/2017 and lived in it three months prior. So is the correct way to claim all the mortgage interest on the house to claim 75% of 2017 interest as an expense on the rental, then 25% on my own taxes? Same mortgage so the lender will just give us one 1098 I’m sure. 

3. To establish the adjusted cost basis this first time, I’m allowed to add in capital improvements I’ve done over the past 10 years when it was our primary residence, right? I know to back out the value of the land as well.  Capital improvements have been substantial, $25k+ of my money net of insurance claim proceeds, so I want to make sure I’m getting all that. 

Thanks BP folks!

Brian