Regardless of what tax year you may have started the process of acquiring real estate, any and all costs incurred are entered based on the tax year and date you actually close on the sale. Period. End of story.
- All costs associated with acquisition of the property are added to the cost basis of the property. Examples of this would be title transfer fees paid at the courthouse to remove the seller's name from the deed and replace it with the buyer's name.
- All costs associated with acquisition of the loan are flat out deductible. How they get deducted, depends on the nature of the real estate purchased. If your primary residence then these costs are fully deductible in the year of purchase. If for business property (such as rental property) then these costs are amortized and deducted over the life of the loan. Examples would include the loan application fee, as well as the cost of a property survey *IF* the lender required it as a condition of approving the loan.
