Home Inspection Fee on purchase of main home

Forum|Forum|2 years ago
January 31, 2024
2 replies
0 views

Can this cost be added to the homes basis

Best answer by TomK2023

Yes, a home inspection fee is only deductible if you are buying a property for rental or as an investment (not if you are a simple homebuyer).

jtax

Employee

Yes. home inspection fees increase your basis and therefore reduce any possible gains. Otherwise they are not deductible.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

peterstribeAuthor

Employee

Do you know if this applies to pest inspections?

AmyC

Employee

Fees that were required to purchase the house, not the loan, are part of the basis.

Publication 551 (12/2022), Basis of Assets - IRS

Settlement costs.

Your basis includes the settlement fees and closing costs for buying property. You can't include in your basis the fees and costs for getting a loan on property. A fee for buying property is a cost that must be paid even if you bought the property for cash.

The following items are some of the settlement fees or closing costs you can include in the basis of your property.

Abstract fees (abstract of title fees).

Charges for installing utility services.

Legal fees (including title search and preparation of the sales contract and deed).

Recording fees.

Surveys.

Transfer taxes.

Owner's title insurance.

Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions.

Settlement costs don't include amounts placed in escrow for the future payment of items such as taxes and insurance.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

TomK2023Answer

Yes, a home inspection fee is only deductible if you are buying a property for rental or as an investment (not if you are a simple homebuyer).

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

peterstribeAuthor

Employee

TomK2023. I understand, it is not deductable, but can these fees or expenses for like home inspections or pest inspection be added to your cost basis in the main home.

ThomasM125

If the inspection fees were associated with qualifying the home to be suitable to be purchased, then they can be added to the cost basis of the home, unless they are only done as a condition to obtain a mortgage.

[Edited 2/1/24 at 12:58 PM PST] @peterstribe

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"