That same publication says below:
"The following are settlement fees and closing costs you can’t include in your basis in the property.
Fire insurance premiums.
Rent or other charges relating to occupancy of the property before closing.
Charges connected with getting or refinancing a loan, such as:
Points (discount points, loan origination fees),
Mortgage insurance premiums,
Loan assumption fees,
Cost of a credit report, and
Fees for an appraisal required by a lender."
Lender's title insurance is REQUIRED by LENDER, as part of "getting the loan". No loan=no lender's title insurance required. From what I am reading this clearly says Lender's Title policy cannot be added to coast basis of rental property. There is another IRS publication (don't remember number) that has a sentence saying something like "the general rule is you can only add to cost basis those expense that you would have paid if you bought the property in cash." so nothing related to lender can be added to cost basis period. CAN YOU PLEASE CLARIFY WHY YOU THINK LENDER'S TITLE INSURANCE CAN BE ADDED TO COST BASIS? THANK YOU
