Are wire transfer fees deductible?

4 Replies

Are wire transfer fees that were incurred with wiring earnest money and final down payment/closing costs to the escrow company deductible on my tax return?  If so, what category would that fall under on the Schedule E?

@Kevin Trumbull

Since this expense was associated with purchasing the property, you will generally add it to the cost basis of the property and depreciate over 27.5 years (39 if commercial).

Hope this helps.

Wire fees along with many of the closing costs would be included in the basis of the property.  With a few exceptions, any costs associated with procuring an asset and bringing it into business use become part of the basis.

Ahh interesting, OK, thank you @Brandon Hall and @Linda Weygant .  So really the only stuff that's going to go in to my Income & Expense tracking spreadsheet will be those true monthly expenses.

So now the question, as a new buy and hold investor, how do I go about starting to track my cost basis?  Is there a spreadsheet I can use?  Any pointers on where I can start reading up more on that?  (I'm going to start trolling the blog and forums for reading material)

Since I am buying this property 'turnkey' and all major repairs should be completed prior to purchase (ie included in purchase price), I believe my cost basis should be fairly easy to calculate, right?  Is the cost basis a one-time calculation, or does that change if a make a capital improvement down the road (such as replacing HVAC in 5 years or something)?

Hi Kevin! Depreciation deductions subtract from your basis over time. Did you find a good program? Right now I use an accountant to keep track of all this, but having my own software would help.

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