Tax Question on Direct Mail Expense

[Daren H.]

Up front disclosure, taxes are not my area of expertise neither is direct mail. I have a question in to my CPA on this and was curious what the tax pros on BP would say. I did some direct mail marketing for several months which resulted in me purchasing a property recently as a buy and hold. The property was purchased outside of any legal entity (in my own name) and is the only property I purchased from the direct mail. Can this direct mail expense be attributed directly to the purchased property in some form as an expense? The property was purchased with a tenant in place so it was immediately in service if that matters. How do I take the expense for the direct mail?

[Brandon Hall]

Based solely on the facts you've provided, the direct mail expense will be capitalized and added to the basis of the property and depreciated over 27.5 years. It's considered acquisiton expense In regards to rental real estate.