BRRRR Investing Tax Questions

[Joe Roberts]

I have a few questions when it comes to calculating taxes on my BRRRR properties I am hoping someone can shed some light on.

1. I want to make sure from my research that I know how to properly arrive at the depreciable basis for a property. I have a property that I purchased for 101,000. Leaving closing costs aside (I have a question about them later), I then made 45,000 in renovations to the property and it later appraised at 199,000. The county assessor has placed a land value of $40,500 and an improvements value of $76,900, so the land % is 34.5% and improvements is 65.5%. Now for the refinance I had an appraisal done which placed the land value at $40,000. As I understand it, I now have the option of A) Multiplying 146,000 (purchase + capital improvements) by 65.5% for depreciable basis = 95,630 or B) Subtracting $40,000 (appraised land value) from 146,000 for depreciable basis = 106,000. Is this correct?

2. If I do a cost segregation study for the purposes of taking advantage of Bonus Depreciation (I am considering some of the algorithm-based DIY services) anything placed in the <20yr category and depreciated 100% is subtracted from my depreciable (27.5 year) basis. So if I can take $20,000 worth of 100% bonus depreciation, then the amount from the above example that I would depreciate over 27.5 years would be 86,000 (106,000-20,000). 

3. I know that I can add certain closing costs to the adjusted basis of my property, but in the case of a BRRRR, I am doing two closings in a year, so can I add all the costs which I incurred twice (e.g. recording fees) to the basis?

4. As long as I used that money from the refinance to further my business (i.e. purchase another property or renovate another property), which I did, I am allowed to deduct the interest payments correct?

5. Hard Money Loans and Private Loans. Can I deduct the interest and points I paid in Hard Money Loans or to Private Lenders for the purposes of BRRRR-ing a property?

6. HELOC. Can I deduct the interest I paid on a HELOC which I took out for the purpose of BRRRR-ing a property?

Anyone with any insight on any (or all) or these points is welcome! Thanks in advance!