Certa The following are settlement fees and closing costs you cannot include in your basis in the property.
- Fire insurance premiums.
- Rent or other changes relating to occupancy of the property before closing.
- Charges connected with getting or refinancing a loan, such as:
a. Points (discount points, loan origination fees), b. Mortgage insurance premiums, c. Loan assumption fees, d. Cost of a credit report, and e. Fees for an appraisal required by a lender.
Neither chapter mentions the treatment that would actually make sense -- amortizing the expenses over the life of the loan. (Publication 535 does mention this treatment.)
It seems to me that chapter 1 of Publication 535 is simply incorrect. Costs related to obtaining a mortgage should be amortized over the life of the loan, not added to the basis of the property. (I know that the difference between acquisition costs and financing costs is not always clear to people, but that hardly justifies pretending that they are the same thing.)
Am I missing something?
Thanks!