What is the cost basis of a home I bought in the United States?

The IRS says if you buy real property, certain fees and other expenses become part of your cost basis. The basis includes settlement fees and closing costs for buying the property. Those can include legal fees, recording fees, surveys, transfer taxes, owner's title insurance, and amounts the seller owes that you agree to pay, such as back taxes or sales commissions. Charges for getting a loan stay out. Those include points, mortgage insurance premiums, and the cost of a credit report. If you improve the property, you increase the basis. If you deduct depreciation, you reduce it. This page does not work out a gain or a tax bill.

Continue on IRS · Publication 551