What closing costs, fees, etc. are deductible from 203k project?

[Eric La Pratt]

I closed on a multi-family 203k project in Chicago that I am house hacking. Since I will be occupying, I understand I can only write off a portion of the expenses (presumably 75% since there are 4 floors and I will live on 1). Some questions:

1. My accountant is saying that pretty much all closing costs and rehab expenses except interest and taxes paid will just be captured by standard 30 year depreciation. Is that accurate
   
2. Is upfront mortgage insurance premium something that can be written off or is that also depreciable?
3. Would the entire rehab cost be captured in general depreciation of the property or should I parse items out? Like, for instance, kitchen cabinets and bath vanities that probably won't last 30 years.
4. I plan to purchase appliances for all the units. Would those be captured in the same rehab depreciation above or would I also separate those?
5. Is I sold for a profit and met the threshold for occupying the property for 2 of the past 5 years, do I still get to not pay taxes on those profits or would that be different because it is currently a multi-family and I'm already taking deductions on expenses and depreciation on the units I am not occupying? So, essentially, I don't pay taxes on 25% of the profits since I occupied 25% of the building? 
6. To piggy back on #5 above, what if the scenario were that I de-converted the property into a beautiful SFH, still met the 2 of 5 year threshold (probably when it was a multi family but maybe not) and sold it for a profit?

Here are some line items that appears on my master statement that I paid for. I am curious to know if any of these are a write off versus depreciable:

• 203 (K) Supplemental Origination
• Application Fees paid outside closing
• Lender Fees
• Processing Fees
• 203 (K) Consultant Fee paid outside closing
• 203 (K) Architectural Fee
• 203 (K) Title Update Fee
• Homeowner's Insurance Premium
• Survey Fee
• Buyers Attorney Fee paid outside of closing
• Title - Escrow Fees, Policy Update Fee, Chain of Title Fee, CPL Fee, Overnight/Express Delivery Service Fee, Email Package Fee, Tax Payment Service Fee, Yadda Yadda Yadda Fee, etc. 
• Permits
• Appraisal fee paid outside of closing
• Mortgage Insurance Premium to HUD

The main reason I am asking is because I track all of my expenses including an estimate of what I should be maintaining in reserves for expected income taxes. 

[Brandon Hall]

@Eric La Pratt this really should be hashed out over a phone call. Too many moving parts. If you don't trust your current accountant, seek a second opinion.

None of the costs you listed at the end of your post are currently deductible with the exception of the PMI. The PMI is only partially deductible - the IRS takes the stance that the upfront PMI really covers several years, so you must deduct a portion of the PMI every year it's supposed to cover (generally seven years max).

1. Accountant is right.

2. Partially deductible, remaining capitalized and amortized each year.

3. Not unless the property is in service which is highly unlikely for a 203k property. 

4. Not unless the property is in service which is highly unlikely for a 203k property.

5. Question isn't clear. If you meet the threshold for Section 121, you don't pay tax on capital gains up to $250k for your personal use (or portion thereof) property. If the home you sold was 75% used as a rental, then you may only use Section 121 for 25% of your old home.

6. If it was previously used as a rental, you will have to pro rate the exclusion - so you're still out of luck.

These are questions you need to run by a CPA who knows your situation. I suggest finding one and going over it with them.