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Level 2
posted Feb 27, 2021 2:25:19 PM

Value of depreciated improvements of rental property at time of sale

How do I determine the current value of the improvements made to a rental property that sold for $157,50. The price included the  original building, improvements, and land? I have the depreciation report with the totals for each.

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1 Replies
Expert Alumni
Feb 27, 2021 2:39:01 PM

The current value of an improvement is the original cost minus any depreciation taken. Land is not depreciable.

 

When you sell, you have to allocate the sales price between the building and the land. You also have to determine if the land value has increased or decrease percentage-wise in relation to the building.