Purchase Price Law and Legal Definition
According to 26 CFR 1.44-5 [Title 26 -- Internal Revenue; Chapter I -- Internal Revenue Service, Department of the Treasury; Subchapter A -- Income Tax], the term purchase price means “the adjusted basis of the new principal residence on the date of acquisition and includes all amounts attributable to the acquisition or construction, but only to the extent that such amounts constitute capital expenditures and are not allowable as deductions in computing taxable income. Such capital expenditures include but are not limited to the cost of acquisition or construction, title insurance, attorney's fees, transfer taxes, and other costs of transfer.”
