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Tax Planning/Tax Basis when refinancing primary or second home

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Question
Should closing cost associated with refinancing a primary or secondary home be added to basis?

I understand that points and loan origination fees will be amortized over life of the loan.

What about other cost associated with the loan, including appraisals, assumption fees, flood determination fees, loan processing fees (HUD line 804-811)?  Would these be added to basis?

What about title, recording, settlement charges, would these be added to basis?

Answer
William - for the most part, closing costs would be added to basis.  Some of the exceptions would be items that are deductible, such as pro-rated taxes, insurance, etc.  Although, there is an election that you can make to amortize taxes as well.

I hope this helps.

Tax Planning

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OWEN S. ARNOFF, EA

Expertise

As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.

Experience

I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

Organizations
National Association of Tax Professionals

Publications
http://www.amazon.com/Owen-Arnoff/e/B00BLRIZNU/ref=ntt_dp_epwbk_2

Education/Credentials
Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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