Do carrying costs increase cost basis?

[Rob Hendricks]

I'm having trouble finding a definitive answer on this. Assuming I purchase a house with the intent to fix and flip in a 6 month window, do the carrying costs I pay increase my cost basis, such that my taxable profit is decreased?

So, for example, assume

Purchase 80k

Rehab 20k

Closing 5k

Carry 10k

ARV 175k

Sell commissions/fees 15k

Would my taxable profit be 45k (carry costs included) or 55k (carry costs excluded)?

Thanks!

[Peter Mckernan]

Quote from @Rob Hendricks:

I'm having trouble finding a definitive answer on this. Assuming I purchase a house with the intent to fix and flip in a 6 month window, do the carrying costs I pay increase my cost basis, such that my taxable profit is decreased?

So, for example, assume

Purchase 80k

Rehab 20k

Closing 5k

Carry 10k

ARV 175k

Sell commissions/fees 15k

Would my taxable profit be 45k (carry costs included) or 55k (carry costs excluded)?

Thanks!

 Carrying cost loan (closing costs on loan and interest), utilities, etc can be written off from a tax standpoint to reduce your liability/