Are Inspection and Appraisal Cost Deductible?

[Ivy A.]

I paid for an inspection and an appraisal for the deal that eventually failed through. Are those expenses tax deductible at the end of the year since I didn't end up buying the property? 

[Nicholas Aiola]

@Ivy A. @Robert Feldman @Rob Horon

If you are not currently in business, the inspection and appraisal cost of a failed deal would sit on your books until you begin business (acquire and place a rental in service), at which point it will be added to the property's basis.

If you are currently in business, you will get differences of opinions from different tax professionals on how to handle these costs. I would recommend speaking with your CPA for specific advice.