Are notary fees and owner's title insurance paid to a Title company at the sale closing considered eligible expenses for adjusting the basis of an inherited second home?

[borsa2]

For sale of inherited home I received a 1099-s which shows gross proceeds only.  I need to make adjustments to the basis by listing allowable closing costs expenses paid, and am not sure if IRS considers notary fees paid to Title Co., or Owner's Title Ins. paid to Title company as allowable expenses.

[MaryK1 · Accepted solution]

Yes, the notary and title insurance are adjustments to basis.  From the IRS:

Your basis includes the settlement fees and closing costs for buying property. You cannot include in your basis the fees and costs for getting a loan on property. A fee for buying property is a cost that must be paid even if you bought the property for cash.

The following items are some of the settlement fees or closing costs you can include in the basis of your property.

• Abstract fees (abstract of title fees).

• Charges for installing utility services.

• Legal fees (including title search and preparation of the sales contract and deed).

• Recording fees.

• Surveys.

• Transfer taxes.

• Owner's title insurance.

• Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions.