The only deductible closing costs for a rental property are those for interest and deductible real estate taxes. Other settlement fees and closing costs for buying the property become additions to your basis in the property. These basis adjustments include:
Those costs that are basis adjustments can be part of your yearly depreciation deduction for the rental property.
Several closing costs cannot be deducted and are not added to basis. For a list of these costs please refer to IRS Publication 527 Residential Rental Property under the sub-heading Basis of Depreciable Property.