Cost basis when selling a house - settlement fees and closing costs

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Subject Author Date Cost basis when selling a house - settlement fees and closing costs Scott S. 06-11-2009  Re: Cost basis when selling a house - settlement f... Alan 06-11-2009
Posted by Scott S. on June 11, 2009, 10:16 am Please log in for more thread options When you sell a house, you can add to the basis certain settlement fees and closing costs that you paid when buying the house. There's a small list of such fees in Pubs 523 and 530 that includes recording fees, transfer taxes, and owner's title insurance among others. Question 1: Can you add to the basis similar fees and costs that you pay when refinancing? Question 2: Is there a more precise list somewhere of what can be added to the basis? I found www.taxslayer.com/support/article.php?id=475 but I'm not sure if it's trustworthy. It says that appraisal costs are added to the basis, which is flatly contradicted by the IRS pubs. Thanks -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on June 11, 2009, 3:31 pm Please log in for more thread options Scott S. wrote: > When you sell a house, you can add to the basis certain settlement > fees and closing costs that you paid when buying the house. There's a > small list of such fees in Pubs 523 and 530 that includes recording > fees, transfer taxes, and owner's title insurance among others. > > Question 1: Can you add to the basis similar fees and costs that you > pay when refinancing? > > Question 2: Is there a more precise list somewhere of what can be > added to the basis? I found www.taxslayer.com/support/article.php?id=475 > but I'm not sure if it's trustworthy. It says that appraisal costs > are added to the basis, which is flatly contradicted by the IRS pubs. > > > Thanks > None of the fees incurred to refinance get added to basis. I wouldn't call the list in Pub 523 "a small list." It's pretty comprehensive. Pub 523 actually says that you can't add to basis the cost of an appraisal "required by a lender" in order to obtain your loan. The pub is correct as fees to obtain financing don't get added to basis. The block of entries in the 800 series on a HUD-1 Settlement Statement are all fees payable in connection with a loan. As such, they would not get added to basis. Line 805 identified at Taxslayer as Inspection Fee is the Lender's Inspection Fee. Line 803 Appraisal Fee is by definition the fee required by the lender. The cost of an appraisal that is not required by a lender to obtain financing may be added to basis. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted House Cost Basis March 2, 2008, 8:32 pm Closing Costs & what line February 8, 2007, 11:51 pm Mutual fund average basis rule - when can you revert to cost basis (actual cost of each share)? November 27, 2008, 8:23 pm are settlement fees deductible September 10, 2009, 12:04 am Selling a house at a lose. February 10, 2007, 7:03 am Selling Rental House in Hawaii April 30, 2008, 9:32 pm 1099-Misc for reimbursed attorney fees in out of court settlement February 10, 2009, 12:46 pm Dividing proceeds from selling house between husband and wife equally January 18, 2007, 3:23 am Legal settlement on sale of house > 2 yrs March 13, 2008, 10:31 am Curious: are legal costs added to property basis? April 11, 2008, 3:01 pm