topic special assessments and cost basis in Investors & landlords

special assessments and cost basis

Brigantine117 — Tue, 24 Feb 2026 06:58:26 GMT

I'm a bit confused on one of the answers I saw. It said that special assessments need to be added to your cost basis, and in the same paragraph it said and that could reduce your capital gain. If I'm increasing my cost basis by adding the assessment, wouldn't that increase my capital gain?

Re: special assessments and cost basis

VolvoGirl — Wed, 12 Jul 2023 14:39:25 GMT

No. If you sold it for 100,000 and your cost basis is 50,000 your gain is 50,000. If you add 10,000 to the cost basis then your cost is 60,000 and the gain is reduced to 40,000 (100,000-60,000). The capital gain is the profit.

Re: special assessments and cost basis

Anonymous_ — Wed, 12 Jul 2023 17:06:26 GMT

@Brigantine117 wrote:
If I'm increasing my cost basis by adding the assessment, wouldn't that increase my capital gain?

No, it would serve to decrease your capital gain when you sell your property.

Example:

Purchase price: $100,000 = Cost basis

Special Assessment: $10,000

Adjusted basis = $110,000 (cost basis plus special assessment)

Sales price: $150,000

Gain: $40,000 (Sales price of $150,000 less $110,000 adjusted basis)