selling a condo - cost base question Federal 1040

[Tax2019Pay]

When selling a condo, can you add the following to the cost base?

1. Capital contribution made to the HOA at the time of moving in after purchase 

2. One time set up fee charged by HOA at the time of moving in after purchase

3. Loan origination charge

4. Flood certification

[Carl]

If all items are actual capital improvements to the property or common areas, then yes. I do question #3 however, and do not thing you can deduct any "set up fees" at all. For one's residence or 2nd home (not used as a rental) HOA fees are just flat out not deductible. However, assessments paid to the HOA do add to the cost basis provided the assessment was used for capital improvements, and the assessment was charged to all condo owners within the HOA and not just a select few.

[Tax2019Pay]

Thanks. Do I understand correctly your response as follows?

the one time capital contribution for property improvement, if charged to all condo owners at the time of moving in is deductible; however, the one-time set up fee may not be deductible since it may be just administrative in nature; and the load related fees such as origination and flood certification will not be deductible since it does not add to the value or cost for the property.

[Mike9241]

1. Capital contribution made to the HOA at the time of moving in after purchase

2. One time set up fee charged by HOA at the time of moving in after purchase

3. Loan origination charge

4. Flood certification

my tax reference resource put out by Thomson Reuters. they produce tax software used by pros.

here's their opinion from a closing statement included in the 2021 Quickfinder manual

1) HOA Capital contribution - nondeductible expense when bought. but I would think if an amount was used for capital improvements to the common areas you could add it

2) HOA processing fee - personal 

3) loan origination charge - deductible in year of purchase - second home - amortizable

4) flood certification - usually a mortgage requirement and thus personal 

[Tax2019Pay]

Hi, Mike: Do you know if condo document fee (for review of financial and legal information in it within the 3 day period before deciding to purchase) can be added to the cost base of condo purchase?  Also can conveyancing fee of about $300 be added to the cost base of condo purchase? Thanks. 

[JosephS1]

Yes.  Document and conveyance fees would be considered part of closing costs and can be considered part of the cost basis of an item purchased or sold, or could also be considered as part of selling expenses and deducted against the sales price in the calculation of gain or loss.

@Tax2019Pay