@techy asked:

What would be the tax treatment for home inspection fees paid before purchase of a rental property?

Am I able to amortize or deduct as expense?

From Intuit:

“Closing costs on an investment property may fall into one of three tax categories:

Deductible as a current expense – These amounts are deductible in full as a rental expense in the year the property is purchased

Amortized over the life of the loan – These amounts must be deducted evenly over the total number of loan payments required at the beginning of the loan

Added to the cost basis of the property – These amounts must be added to the cost basis (i.e. the purchase price) of the property and must be depreciated”

Fees for your inspections add to your cost basis of the property.

Cost basis = the original purchase price + closing costs (e.g., legal fees, recording fees, title-search fees, home inspection…), and is used to offset capital gains when selling the property.

According to the IRS:
“Generally, deductible closing costs are those for interest, certain mortgage points, and deductible real estate taxes.

“Many other settlement fees and closing costs for buying the property become additions to your basis in the property and part of your depreciation deduction, including:

Abstract fees Charges for installing utility services Legal fees Recording fees Surveys Transfer taxes Title insurance Any amounts the seller owes that you agree to pay (such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions).

Additional Information

About Publication 17, Your Federal Income Tax

Publication 527, Residential Rental Property (Including Rental of Vacation Homes)

Publication 535, Business Expenses

“Category
Sale or Trade of Business, Depreciation, Rentals

“Sub-Category
Rental Expenses

For additional information about how to report the expenses incurred during the purchase of your rental property, see this line by line breakdown of a typical HUD-1 Statement.

Information from the IRS about general business deductions:

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses

When you’re done sorting through all of the above, the best advice that I can give to you is:
A CPA who is well-versed in investment properties is priceless…find and retain one!