topic Which of these are eligible to include as closing costs for tax basis? in Deductions & credits

Which of these are eligible to include as closing costs for tax basis?

Yoyoguy — Tue, 10 Mar 2026 07:17:18 GMT

I read this https://www.irs.gov/pub/irs-pdf/p523.pdf to calculate tax basis for my home. Still, it's not very clear which ones are eligible vs ineligible for my home. Possible to help me sort out, which is eligible to include in tax basis?

1. Appraisal Fee

2. Credit Report

3. Flood Certification

4. Tax Service Fee

5. Title - Courier Fee

6. Title - Endorsment Fee

7. Title - Lender's Title Insurance

8. Title - Notary Fees

9. Title - Other

10. Title - Recording Service Fee

11. Recording Fees (Deed)

12. Recording Fees (Mortgage)

Re: Which of these are eligible to include as closing costs for tax basis?

Mike9241 — Thu, 22 Dec 2022 09:55:45 GMT

everything from #5 through #12. the others are non-deductible personal expenses.

Re: Which of these are eligible to include as closing costs for tax basis?

NCperson — Thu, 22 Dec 2022 10:42:39 GMT

@Yoyoguy I would also exclude #7 and #12 - those relate to a mortgage and can not be part of the basis.

So, 5,6,8,,9,10, 11 can be part of the basis.

#1-#4 are also relatead to the mortgage which is why they are excluded,

Re: Which of these are eligible to include as closing costs for tax basis?

Carl — Thu, 22 Dec 2022 15:15:20 GMT

Assuming this purchase was for your primary residence or a 2nd home and not any type of business property (such as rental property).

Those costs associated with acquisition of the loan are flat out not claimed anywhere on your tax return. Examples would include loan application fees and appraisal fees if an appraisal was required as a condition of loan approval.

The following are not reported anywhere on your taxes.

1. Appraisal Fee

2. Credit Report

3. Flood Certification

4. Tax Service Fee

7. Title - Lender's Title Insurance

12. Recording Fees (Mortgage)

If this property is business property, then the above costs are amortized and deducted (not depreciated) over the life of the loan. But for personal property it's not reported anywhere on your tax return.

Costs associated with acquisition of the property are added to the cost basis of the property. Examples would include the recording fees paid at the courthouse to remove the seller's name from the deed and replace it with the buyer's name.

For what you provided, that would include:

5. Title - Courier Fee

6. Title - Endorsment Fee

8. Title - Notary Fees

9. Title - Other

10. Title - Recording Service Fee

11. Recording Fees (Deed)

Generally, none of this comes into play until the tax year one of three things happens in your life.

1. You convert the property or any part of it to a rental or some other type of business use. (such as a home office)

2. You sell the property

3. You die.

Re: Which of these are eligible to include as closing costs for tax basis?

Yoyoguy — Thu, 22 Dec 2022 16:35:13 GMT

Thank you all. I also got lender credit from bank. Would that credit affect tax basis while I claim the above?

Re: Which of these are eligible to include as closing costs for tax basis?

NCperson — Thu, 22 Dec 2022 17:02:21 GMT

@Yoyoguy - see your other post; I answered it there