Also for anyone reading this blog on their own behalf. The 2nd opinion I posted above I don't believe has much weight since I have info from a conversation I had with an IRS agent in 2009 that the only loan costs that should be amortized or added to cost basis of a building are those for START UP COSTS, not refinancing for lower int rate, remove PMI.  Loan costs for refinancing for this type of thing, not related to startup costs, should be expensed in year incurred. Also my notes indicated that Pub 527 where it reads under heading "Expenses paid to obtain a mortgage"...this only pertains to Loan costs associated to start up costs, although misleading.