Cost Basis

Total cost basis for tax purposes (purchase + closing + improvements).

Example Result

Sample Data

$396,550

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Cost Basis Formula

Purchase Price + Closing Costs + Rent Ready Costs - Seller Concessions

Purchase Price $385,000

+ Closing Costs $11,550

+ Rent Ready Costs $0

- Seller Concessions $0

= Cost Basis $396,550

What This Means

A sample property priced at $385,000 with $2,850/month rent has a cost basis of $396,550 at Purchase (Month 0). A higher cost basis means less capital gains tax when you sell. All legitimate acquisition costs should be included to maximize your basis and minimize future tax liability.

Where This Value Comes From

Cost Basis is not entered directly — it is calculated from Purchase Price, Closing Costs, Rent Ready Costs, and Seller Concessions. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Cost Basis

Purchase Price

The agreed-upon price to acquire the property.

Found on your purchase contract / hud-1

$385,000

Purchase

Closing Costs

Fees and expenses paid at the time of purchase beyond the down payment.

Found on your closing disclosure

$11,550

Purchase

Rent Ready Costs

Initial repairs and improvements needed before renting the property.

Found on your contractor bids

Purchase

Seller Concessions

Credits from the seller that reduce your out-of-pocket closing costs.

Found on your purchase contract

Purchase

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Why It Matters

A higher cost basis means less capital gains tax when you sell. All legitimate acquisition costs should be included to maximize your basis and minimize future tax liability.

Detailed Explanation

The cost basis is the total amount you paid for the property including purchase price, closing costs, and improvements. It is used to calculate capital gains when you sell.