Journal entry for closing costs when purchasing a property

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Closing costs simply increase your basis in the property and are not an expense

"Add a home’s purchase price to the closing costs, such as commissions, to determine the home’s total cost. Write “Property” in the account column on the first line of a journal entry in your accounting journal. Write the total cost in the debit column. A debit increases the property account, which is an asset account. For example, assume you paid $290,000 for a home and paid $10,000 in closing costs. Add $290,000 to $10,000 to get $300,000. Write “Property” in the account column. Write “$300,000” in the debit column"

https://smallbusiness.chron.com/record-journal-entries-purchased-home-accounting-38518.html

https://smartasset.com/taxes/are-closing-costs-tax-deductible

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  • 4 months ago by vince