If I purchase a rental property and create a Fixed Asset for it in QB, should the closing costs be bundled into that Fixed Asset's cost basis, or should the closing costs be applied to an Expense account?
In other words, if the property is 300k and closing costs are 10k, do I create a Fixed Asset of 310k? Or do I create a Fixed Asset of 300k and a "Closing costs" Expense account of 10k, or is this my choice?
I am not sure but I believe it has tax implications. If I make the 10k part of the asset, it increases my cost basis thus lowering the capital gain when I sell. But if I call it an expense, I get the deduction immediately.
Do I have this right?
