Question

How to calculate cost basis of a new rental property?

Forum|Forum|1 year ago
August 6, 2024
2 replies
0 views

I have a closing statement with me with a purchase price of $2,100,000. but ends up as $2,126,464.86

Can I use take $2,126464.86 as a cost basis of the property which include appraisal fee, originaation fee, escrow fee, and notrary service, and etc.

DoninGA

Employee

Go to the IRS Publication 527, Residential Rental Property, on page 11 for settlement costs that can be included in the basis of the property - https://www.irs.gov/pub/irs-pdf/p527.pdf#page=11

C

csdl2024Author

Thanks for the post.

Based on the above table, is county property tax of $691.70, the only item, that can not be included in the cost basis ?

DoninGA

Employee

@csdl2024 wrote:

Thanks for the post.

Based on the above table, is county property tax of $691.70, the only item, that can not be included in the cost basis ?

If the taxes were not paid on behalf of the seller then you cannot include them in your basis.

rjs

Employee

@csdl2024

You cannot use TurboTax to prepare tax returns for clients. TurboTax is only for do-it-yourself consumer use and cannot be used by paid preparers. Intuit (the company that makes TurboTax) has three tax software product lines for professional preparers: ProSeries, Lacerte, and ProConnect. You can find information about all three product lines at the following link.

Professional tax software for preparers