Hello, can "Escrow fee" - the charge owner of rental property paid at closing for "escrow service" - be added to cost basis of rental property? I assume it goes under "legal fees"? Thank you

[User ID 4993393]

Hello,
1. Can "Escrow fee" - the charge owner of rental property paid at closing for "escrow service" to the escrow company - be added to cost basis of rental property or not? I assume it goes under "legal fees"?

2. Can "Lender's Title Insurance" be added to cost basis of rental property? I read somewhere that "only items that you would have paid if you bought property in cash" can be added to cost basis and nothing related to lender, at all. Publication 527 does not specify Owner's or Lender's title insurance and only says "Title Insurance" can be added to cost basis.

This is how it is on my Closing statement:

Title&Escrow Charges:

1. Title - Escrow Fee                                      Chicago Title Company                   $XY amount.
2. Title - Lender's Title Insurance                Fidelity National Title                       $Z amount

Thank you

I read publication 527, and saw the list of what can be added. I guess I am asking is escrow fee added as "legal fees"?

[Mike9241]

for a rental property they add to your total basis,  separate categorization is not necessary.  then you need to split your total basis between land - not depreciable and the building which is.

[User ID 4993393]

Thank you! As I started adding both items to rental property cost basis in TurboTax, it gives me an option to write it off fully by using safe harbor, since the amount is below $2500. It says I first choose "safe harbor" in TT, then I would simply add them into Miscellaneous expenses for that rental property. Is that OK - to write those escrow/title fees in one year under safe harbor?