Should I expense or capitalize post acquisition eviction costs

[Abdenour Achab]

I acquired a house in September 2010. I evicted the previous owner in December 2010. I paid the eviction costs in January 2011. I listed the house for sale in March 2011. I expect to sell the house in 2012.

The house is most likely a dealer property. Should I expense the eviction costs on my 2011 tax returns, or should I add them to the basis of the house ?

Thanks in advance,

Abdenour

[Abdenour Achab]

Hi Steven,

> Could any of those possibly be good rentals?

Most would be. But not for me. I live in California, and the houses are in Oklahoma County. Given the fact that California prices are now low, I would rather pull out my money from Oklahoma and invest it in California. An Oklahoma investor, who bought a house from me in Midwest City in Summer 2011, told me he might be interested in buying one or two (of the best two I have left - I have already sold 4) after he is done fixing one or two of the two houses he bought this year. He is keeping his buys as rentals.

Abdenour