Right of Redemption

[samandersen8]

I bought a house at a foreclosure sale. A separate investor bought the redemption rights. I paid him to get the rights. I'm need to know where to put the amount I paid him on my taxes.

[VolvoGirl]

I would think you add it to the cost basis of the house when you sell it in the future.

[Carl]

I can't find anything on the IRS website that addresses real estate specifically. But what I do find (mostly dealing with stocks, bonds, and dividends) states that redemption cost are not deductible in any way, shape form or fashion, nor do they change the cost basis of anything.

@TurboTaxSree can you cite anything on this? I've looked, and looked, and looked, and looked.....