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Acquisition Costs (revisited)

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acquisition costs

By Jason Watson, CPA
Posted Tuesday, August 27, 2024

The question comes up often- what costs can I deduct in the acquisition of a rental property. There are several, but the rub is that most expenditures associated with purchasing a rental property are considered costs (versus expenses) and are depreciated or amortized accordingly. As such, you get a deduction for acquisition expenditures, but it takes time.

This section is a mini me of our rental property acquisition costs section. Here is a quick list-

  • Travel Expenditures
  • Closing Costs
  • Loan Costs

Here are some more acquisition and closing costs that are commonly overlooked-

  • Application fees, and similar expenses.
  • Property appraisals and inspections including architectural, engineering, environmental, and geological services.
  • Legal and accounting fees including tax advice to review offers, purchase or sales agreements.
  • Costs to obtain regulatory approval or secure permits (think short-term rental permits).

Jason Watson, CPA, is a Senior Partner of WCG CPAs & Advisors, a boutique yet progressive tax,
accounting and business consultation firm located in Colorado serving real estate investors worldwide.

Jason Watson CPA LinkedIn     Jason Watson CPA Email

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