Ok that makes sense.
How about Bank required appraisal fees and credit reports. These were done prior to me being the legal owner. These cannot be added to basis. Can I deduct them as start up expenses?
IRS 527 says:
The following are settlement fees and closing costs you can’t include in your basis in the property.
1. Fire insurance premiums.
2. Rent or other charges relating to occupancy of the property before closing.
3. Charges connected with getting or refinancing a loan, such as:
a. Points (discount points, loan origination fees),
b. Loan assumption fees,
c. Cost of a credit report, and
d. Fees for an appraisal required by a lender.
