IRS Publication 527, Chapter 2, page 7 has a detailed listing of what is included in the basis or Depreciable Property.
Settlement fees and other costs.
The following settlement fees and closing costs for buying the property are part of your basis in the property.
• Abstract fees.
• Charges for installing utility services.
• Legal fees.
• Recording fees.
• Surveys.
• Transfer taxes.
• 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.
The following are settlement fees and closing costs you can’t include in your basis in the property.
1. Fire insurance premiums.
2. Rent or other charges relating to occupancy of the property before closing.
3. Charges connected with getting or refinancing a loan, such as:
a. Points (discount points, loan origination fees),
b. Loan assumption fees,
c. Cost of a credit report, and
d. Fees for an appraisal required by a lender.
Also, don’t include amounts placed in escrow for the future payment of items such as taxes and insurance.
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