Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-09-2008, 08:11 PM
Junior Member
 
Join Date: Feb 2007
Posts: 12
What closing costs can I deduct from a purchase of a rental property?

I purchased a rental property in 2007 and would like to know what are the expenses that I can include as part of the closing costs! Thank you!



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 02-11-2008, 04:50 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,398
Blog Entries: 3
What closing costs can I deduct from a purchase of a rental property?

A taxpayer incurs several types of closing costs that are associated with the purchase of his rental property. However, the IRS tax code specifically states that the only deductible closing costs are those "for mortgage interest and real estate taxes."

The other settlement fees and closing costs for acquiring the rental property become "additions to your basis in the property."

The IRS has provided a list of the other settlement and closing costs (that are additions to basis in the property) as follows:

* Abstract fees,
* Charges for installing utility services,
* Legal fees,
* Recording fees,
* Surveys,
* Transfer taxes,
* Title insurance, and
* Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees.

The costs that are basis adjustments will be part of your yearly depreciation deduction for the rental property.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning