, shipping and installation costs are added to Basis because those are what are required to put it "in service".
That's clearly stated in IRS Pub 546 on page 11 under "Cost as Basis". However, I've seen another pub of which I can't recall/find the number that basically states what you say. However, the publication I can't recall specifically and explicitly applies to what would be considered "earned" business income, and not passive income.
Unfortunately, all the pubs I've dealt with in that past that do relate to rental property/passive income, flat out do not address start-up expenses for passive income producing activities in any way, shape, form or fashion that I can find. Since there are pubs that "do" address those expenses for other types of income, I do not recommend anyone "try" the IRS on this for passive/rental income unless they have the resources to challenge it in tax court. (I do wish it would be challenged, so this matter could be put to rest once and for all. It's been going on for decades now.)
