Yes, your cost basis will include the purchase price of the property, plus the full value of any renovations.
Over time you will depreciate both the property (Not land), and the renovations. As you said you will incur "depreciation recapture" when you sell the property. This will be applied against the full cost basis of the property including renovations.
Additional closing costs that are included in Cost Basis are: (Often called Abstract and Recording Costs)
- Tax stamps,
- Attorney fees,
- Title insurance,
- Title search and
- Document preparation fees.
These are often posted to the original purchase of the property.
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