chrisdown
2007-09-24 13:13
I paid an assignment of contract fee as part of the purchase of a beach condo last year. It this fee now part of the basis or do I expense this fee in my investment property business tax return?
I paid an assignment of contract fee as part of the purchase of a beach condo last year. It this fee now part of the basis or do I expense this fee in my investment property business tax return?
The assignment fee is included in your purchase price, and therefore, included in your cost basis.
NewKid,
Wouldn't that depend on how (or if) it was identified on the HUD-1 and what it was called?
Just curious.
In this case, the assignment fee was not included on the HUD-1. The assignment fee was paid completely outside the closing. To be conservative, I decided to put this cost into the basis rather than expencing it (as a cost of acquisition). Thanks for the replies thus far.
Whether or not an item shows up in the HUD-1 is not what determines if it is expensed or capitalized. It is the nature of the item itself. My appraisal costs for a 1031 were done completely outside of the escrow, yet this is clearly a capital item. The assignment fee is not an operating expense for the beach condo and should be part of the basis to be amortized.
[ Edited by edmeyer on Date 10/29/2007 ]