Is the cost of an appraisal tax deductible?

[Heli Beran]

Hey everyone,

Do you know if the cost of a multi-family apartment building appraisal is tax deductible?  The appraisal quote from the lender is around $3500, which is obviously a lot of money! Thankful for any insights you might have:)

[Jonathan Taylor Smith]

Be it single or multi-family, when I'm handling accounting for ALL expenses related to a property acquisition, I count them as tax deductible expenses against the property (and its future income or sale gain) with full details and invoices attached. Then it's up to my accountant to determine the legitimacy of a given expense as being tax deductible or not. This goes for the appraisal, inspection, survey, closing costs, etc... But you aid your accountant greatly in this effort by having all these expenses reflected on the closing statement.

[Eliott Elias]

It is part of your closing costs, so yes include it.

[Simon W.]

Quote from @Heli Beran:

Hey everyone,

Do you know if the cost of a multi-family apartment building appraisal is tax deductible?  The appraisal quote from the lender is around $3500, which is obviously a lot of money! Thankful for any insights you might have:)

It is deductible.

If you are flipping within 12 months, then you can expense the whole thing the same year.
If you are buying a rental and holding it for long term, it will be amortized. Your accountant or whoever is doing your taxes doesn't have to be a CPA will help you figure it out the percentage or the type of method to use.

[Bob Stevens]

Quote from @Heli Beran:

Hey everyone,

Do you know if the cost of a multi-family apartment building appraisal is tax deductible?  The appraisal quote from the lender is around $3500, which is obviously a lot of money! Thankful for any insights you might have:)

Of course its deductible