Writing off "cash on top" of a financed duplex purchase

[Gene Fereaud]

Hi there!

Just bought my first property. But in the competitive Los Angeles market, I had to put up additional cash on top of the deal in order to have my loan taken seriously. Anyone in SOCAL familiar with how to write that off on our taxes? The money was transferred digitally, but not part of the loan.

Thank you!

[Bill B.]

If you’re talking about paying over asking or having a larger downpayment: Those aren’t  expenses. Those funds just get added to your cost basis. This allows for a larger annual depreciation and lower capital gains if you ever sell. 

As mentioned above: if you paid some sort of “bribe/incentive” to the seller  you’ll need the receipiant’s social security number and they’ll need to declare the income.