How to deduct commission fee paid to my broker in the closing cost of rental property in tax return? Is it part of rental expense? How about legal fee and capital HOA fee

[Anita01 · Accepted solution]

No, it's not part of rental expense, it's deducted from your purchase price to lower your cost basis.  Legal fees same as commission.  Capital fees to HOA would be an expense.

[fayyu1129]

Thanks for the details. How about the tenant finding fee I paid to rental property management company, can it be part of rental expense? I only get statement of monthly management fee from my rental property management company, but no statement of the tenant finding fee. I am afraid if I enter it as rental expense and got audited, there is no document to support.

[Anita01]

If you are paying a management company, simply insist on a receipt.  If need be, make it out yourself and get them to at  least sign it

[Anita01]

And yes, ti would b ea marketing expense.

[fayyu1129]

How about the points I paid to mortgage lender and the inspection cost during closing of the rental property? Can they be deducted as rental expense or considered as cost basis into depreciation?

[Anita01]

The points would be a closing cost

[Anita01]

he inspection fee would be a selling expense.

[fayyu1129]

When calculating depreciation, should the cost of my rental property (asset) the purchase price I paid during closing?