Sales expenses apply to both the buyer and the seller. So which are you? I assume this is for a rental property or some other kind of business property you either bought or sold?
What kind of closing statement do you have? Is it a HUD-1 form maybe?
There are two types of sales expenses when it comes to real estate.
- Those expenses associated with acquisition of the property are added to the cost basis of the property. Examples of this would include title transfer fees paid at the courthouse where the title/deed to the property is filed.
- Those expenses related to acquisition of the loan are amortized (not capitalized) and deducted (not depreciated) over the life of the loan. Examples of this would include points on the loan, and the cost of a property appraisal if such appraisal was required by the lender as a condition of qualifying for the loan.
