What is included in cost basis when calculating adjusted cost basis for home sale
What's included in the calculation for adjusted cost basis? Specifically:
(1) Are loan costs -origination charges: process/underwriting, and tax service fees included?
(2) Are property taxes included?
01497
1 Replies
Cynthiad66
Expert Alumni
Mar 15, 2022 2:17:57 PM
The adjusted basis is calculated by taking the original cost, adding the cost for improvements and related expenses and subtracting any deductions taken for depreciation and depletion.
Your cost basis typically includes:
The original investment you made in the property minus the value of the land on which it sits
Certain items like legal, abstract or recording fees incurred in connection with the property
Any seller debts that a buyer agrees to pay
Additions and improvements to the home
Money that you spend to restore property after damage or loss
Legal fees spent that relate to the property in question