CPA REG Exam-Basis of Property- The Basics-By Darius Clark-

https://course.i75cpa.com/course/dari... The Basis of Property is its original cost. This cost includes invoice price of a machine plus sales tax, excise tax, attorney fees, freight in, installation, testing prior to placing service. For real estate add mortgage assumed, appraisal fee, owners title policy and recording fees, and add any delinquent property taxes paid at closing. If the buyer pays delinquent property taxes that were owed by the seller, those taxes are added to basis (treated as part of purchase price) Other costs in connection with the purchase are not capitalized but expensed such as insurance paid for fire, casualty insurance, any current property taxes paid (even if paid at closing) When a taxpayer owns real estate, the city or state could impose a one-time special tax assessment for sewer, sidewalk improvement. One-time special assessment taxes are capitalized, not expensed. Add the cost to the basis of the property. Other capitalized costs include non-routine; roof replacement, new gutters, improvements. Routine costs are expensed, repair and maintenance, pest control, utilities, refuse removal.