Originally posted by @Michael Plaks:
@Wen Chen
None of that is an expense.
Costs specifically connected to obtaining the mortgage (appraisal, credit report, origination fee etc.) are combined into "loan costs" and then set up for amortization over the length of the mortgage.
The rest is added to the purchase price and results in "tax basis" which is then set up for depreciation over 27.5 years, after allocating a portion of the basis to land.
If this process sounds complicated (which it is) - you may need an accountant to help.
Thank you so much for your help. I think I have an idea how to separate these fees:
Loan cost - Amortized over life of loan
- Application fee
- Appraisal fee
- Loan Origination Fee (delivery fee)
- Credit Report Fee
- Record Mortgage fee
- Mortgage tax
- HOA questionnaire
- title insurance (mortgage)
- bank attorney fee
Tax basis
Abstract and recording fees
Legal fees, title search, document preparation
land survey
- flood certification fee
- Inspection fee
title insurance
Is there anything I listed under the wrong categories?
