Dear Experts:
On HUD-1, can the following be added to the cost base of the home?
Purchasing:
Line 104 Reimbursement for condo docs
Line 105 Conveyancing fee
Line 1304 Capital Contribution to the Condo Assn at the time of moving in (I assume that this was for community repair and renovation)
Thanks
Selling:
Sewer pipe inspection fee - required for selling the condo
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All of the items you listed for the property you purchased can be added to your cost basis. The inspection for the condo you are selling would be reduction in sales proceeds, as opposed to an increase in basis. It provides the same result either way. Sort of a distinction without a difference.
DavidD66: Thanks so much. Two more questions:
In the first year when a personal property was converted to rental property, say in mid-year, one should prorate the depreciation based on months of rental, correct?
In the final year when the rental property was sold, say in March, should I depreciate for the whole year or prorate depreciation based on the months of rental?
Thanks
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