Can I deduct appraisal cost and closing fees for a HELOC on a rental property? Not a refi, just a HELOC for funds to improve the property.
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Can I deduct appraisal cost and closing fees for a HELOC on a rental property? Not a refi, just a HELOC for funds to improve the property.

 
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Can I deduct appraisal cost and closing fees for a HELOC on a rental property? Not a refi, just a HELOC for funds to improve the property.

Generally, if the cost is associated with operating the property (real estate taxes, hazard insurance, etc.) they are deducted as expenses, whereas costs associated with purchasing the property (title search fees, recording fees, etc.) are added to the property's cost basis, which means they get depreciated.

See https://ttlc.intuit.com/questions/1900982-what-can-i-deduct-when-refinancing-rental-property

Closing costs, including the below are not tax deductible but may increase the cost basis of your property  which may benefit you in the event of sale.

  • Attorney fees in connection with obtaining property

  • Commissions

  • State stamp taxes and transfer taxes

  • Tax service fees

  • Title policy fees or title insurance

  • Miscellaneous abstracts of title, surveys, recording of deed

  • Appraisal Fee


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