Assignment fees as it pertains to taxes

[Ed O.]

Looking for clarification here.

Contract price:20k, assignment fee 5k.

If I purchase a contract for 5k and close on the home for 20k, would I be able to write off the 5k assignment fee in full for the tax year, or would that be added back to the basis of the property?

thanks in advance!

[David Beard]

Added to the basis and depreciated if rental property (don't depreciate if planning to flip it). Any expenses directly related to the acquisition of the property need to be added to the basis.