What specific HUD Settlement Charges can I add to the basis of my personal property turned rental property?

Written By: admin on June 28, 2009 No Comment

IRS publication 551 spells this out pretty clearly I reckon, but I want to double check. I appreciated their clarification too "A fee for buying property is a cost that must be paid even if you bought the property for cash."

I am going to include all charges I incurred under Title Charges (1100+), Government Recording and Transfer Charges (1200+), and Additional Settlement Charges (1300+).

These items will be added to my buy price and then I will use the land/improvements ratio I have from an appraisal to calculate the depreciable value. Then I can also add improvements I made to the home before I went out and turned it into a rental property, like the actual buy value of ceiling fans.

Sound right?
The last paragraph is my thought process to figure out my cost basis for depreciation, not something about borrowing closing costs.

I'm only refering to the HUD-1 Settlement Statement, hence the reference to the items in the settlement statement. I'm not talking about a house aquired from the US Department of Housing and Urban Development.

I guess leaving off the "-1" really messes everything up…