Determining value of a building vs land for rental depreciation purpose (appraisal, percentage)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I bought a HUD repo in 1986 in Oklahoma City, OK. I lived in it for a while and got orders out of state (I was in the service). I began renting it out in 1991 but never claimed depreciation on it over the years.
So I was finally able to sell the house this year and learned I must deduct depreciation whether I took it or not. So, to determine the depreciation I should have taken I need the value of just the house, not the property.
How can I get it? I have the original paperwork from 1986 but there is no appraisal (I guess since it was a repo or I just never got a copy.)
I do know that the annual taxes that year were $346 and I paid $38,000 for the house.
Check with the county assessor or treasurer and see if you can get the formula they use for valuing property for tax purposes. Usually they have a formula that amounts to some percentage (20% land, 80% building) or ratio. Then you can figure your tax basis and take the appropriate amounts.
Your property tax bill does not arrive with value for land and improvements separately listed?
The tax bill from the year you purchased is the only one you need. Depreciation is based upon the purchase price and doesn't change every year. Tax collector might be able to look it up for you.
And remember, land never depreciates; only improvements on it.
Well, land can certainly depreciate in value--but you can't claim depreciation for tax purposes.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.