U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 09-25-2019, 05:40 PM
 
Location: Fort Lauderdale, Florida
9,635 posts, read 8,585,642 times
Reputation: 21080

Advertisements

Generally speaking near the ocean, the dirt is where the value lies. Not in the building.
Reply With Quote Quick reply to this message

 
Old 09-25-2019, 05:47 PM
Status: "Hard Money Lender " (set 1 day ago)
 
169 posts, read 37,361 times
Reputation: 373
Quote:
Originally Posted by blueherons View Post
Generally speaking near the ocean, the dirt is where the value lies. Not in the building.
Exactly .. I have a property where the land value is $600,00 and the improvement is $450,000.
Reply With Quote Quick reply to this message
 
Old 09-25-2019, 07:32 PM
 
16,275 posts, read 13,960,840 times
Reputation: 22621
Quote:
Originally Posted by LifeIsGood01 View Post
Never say never, it can depreciate if they find something toxic on it or if they find a sink hole.

Land can depreciate if no one wants to buy it or if the area becomes bad. Or if they force you to put city water and sewer on it and get rid of well and septic

I would not say never I would say generally doesn't depreciate.

Land is not more valuable than the building. We have lots in my area for about $10K that's all it's worth, If you build a small $100K home it's now worth $110K or more.

Also depreciable may not be the same as depreciates. Depreciable to me means it can not be deducted as a losing asset.
Lol, many places the land is more valuable, way more valuable, than the structure on it.
Reply With Quote Quick reply to this message
 
Old 09-25-2019, 08:35 PM
 
10,708 posts, read 12,625,289 times
Reputation: 15157
Quote:
Originally Posted by mrxalleycat View Post
CPA: "Land is never depreciable, although buildings can depreciate"

Is it true land never depreciate therefore making it a "fixed" asset?
Nope.......................How many golf courses sold and then went bankrupt? How many farms?

How about the land in Fukushima, Japan? Last month's land in the Bahamas after Dorian?

How many superfund cleanup sites are worth negative amounts?
Reply With Quote Quick reply to this message
 
Old 09-25-2019, 09:09 PM
 
4,958 posts, read 4,216,501 times
Reputation: 10520
Quote:
Originally Posted by mrxalleycat View Post
CPA: "Land is never depreciable, although buildings can depreciate"

Does that mean land is more valuable than the building?

Is it true land never depreciate therefore making it a "fixed" asset?

Land is a fixed asset, as are buildings, equipment, vehicles, & office furniture. They are all non-current assets (long-term assets) that are used to operate the business. As opposed to current assets, which are assets that will be converted to cash within the year.

Non-current assets, not including land, depreciate according to the number of years assigned to each as useful life. So they are recorded that way on the balance sheet each year until they are fully depreciated & have no value.
Reply With Quote Quick reply to this message
 
Old Yesterday, 05:49 AM
 
1,857 posts, read 874,797 times
Reputation: 3179
Quote:
Originally Posted by jdhall1 View Post
In some neighborhoods,the land portion is assessed for tax purposes higher than the dwelling.
That's my neighborhood. Our lot is worth $350k, while the house is worth about $50k on the tax appraisal. If we were to sell our house, it would likely be torn down, and a much larger residence built, since no one really wants to pay $400k+ for a 1400 sq ft 2/1.

For Federal income tax and accounting purposes, land is not a depreciable asset. When land with a structure is purchased, the rules require that appropriate values be assigned to land and improvements, with the improvements being subject to depreciation. This is for accounting and tax purposes only. In both cases, when the property is sold, the difference between the sale price and the depreciated value is a gain, which may be subject to tax.
Reply With Quote Quick reply to this message
 
Old Yesterday, 06:03 AM
 
5,665 posts, read 2,607,494 times
Reputation: 16279
Quote:
Originally Posted by City Guy997S View Post
Nope.......................How many golf courses sold and then went bankrupt? How many farms?

How about the land in Fukushima, Japan? Last month's land in the Bahamas after Dorian?

How many superfund cleanup sites are worth negative amounts?
You have missed the point.


In accounting for revenues and expenses (for example, playing tax on the income from a rent house), expenses are deducted from revenues to determine taxable income. If you build a deck onto your rent house, the cost of that deck is considered an expense, but it is spread out over a certain number of years, that duration of time being equivalent to the useful life of the deck. (Let's say 10 years, I don't know what it is in reality). If you buy a rent house, the cost of the house itself is considered an expense, spread out over a number of years that legally represents the useful life of the structure (I think it's 30 years). But according to our tax laws, land has an infinite useful life, thus you cannot charge the purchase cost of the land against your revenues, either in the year you buy it, or spread out over a number of years.


Now, when you go to sell that rent house, the value of the land and improvements may be greater, equal, or less than what you paid for it. If it's greater that's a capital gain and you MAY pay tax on it; if it's less that's a loss and you MAY be able to deduct it from your revenues for the year, or you MAY be able to spread the loss out over multiple years. I don't know any details of the accounting for capital losses and gains in the sale of land. But the point is that


Depreciation is a different thing than Loss of market value.
Reply With Quote Quick reply to this message
 
Old Yesterday, 06:06 AM
 
5,665 posts, read 2,607,494 times
Reputation: 16279
I have lived in a place where the house I was living in had essentially ZERO market value. In that neighborhood, no house under 3000 square feet has been sold except to be torn down, in the last 10 years. The 1500 sq. ft. house I lived in would actually subtract a bit from the market value of the property compared to an equivalent empty lot, as the buyer would have to pay for demolition.


So in truth the house had a small negative market value; all the value of the property was in the land. Of course the tax assessment did not show it that way, but we all know that tax assessments are not the same thing as actual market value.
Reply With Quote Quick reply to this message
 
Old Yesterday, 09:01 AM
 
73,586 posts, read 73,419,195 times
Reputation: 51190
When we had the house in the poconos the lots were 7-12k ..the homes 150-400k
Reply With Quote Quick reply to this message
 
Old Yesterday, 09:03 AM
 
Location: Tennessee
24,550 posts, read 18,276,350 times
Reputation: 28847
Quote:
Originally Posted by LifeIsGood01 View Post
Never say never, it can depreciate if they find something toxic on it or if they find a sink hole.

Land can depreciate if no one wants to buy it or if the area becomes bad. Or if they force you to put city water and sewer on it and get rid of well and septic

I would not say never I would say generally doesn't depreciate.

Land is not more valuable than the building. We have lots in my area for about $10K that's all it's worth, If you build a small $100K home it's now worth $110K or more.

Also depreciable may not be the same as depreciates. Depreciable to me means it can not be deducted as a losing asset.
Absolutely.

There is tons of vacant land here in the coal country part of southwest Virginia. As coal has declined, the overall area has declined and housing/land values in many of the impacted communities are basically in free fall.

Very few people are going to want undeveloped acreage that is an hour away from even small cities, basic medical, no jobs, etc.
Reply With Quote Quick reply to this message
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.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top