First-year changing a property from a primary residence into a rental unit. It is a second-floor condo within an HOA with no direct ownership over the land. On the tax assessment the land value is 53% of the total assessment. This effective cuts my depreciation base into half of the cost basis. Is this the only acceptable way to determine this. Can I just subtract the tax assessment land value from the cost basis. I.E. say land assessment was $75,000 and cost basis was $400,000. Does the decpreciation basis need to be $188,000 or can it also be $325,000? If I contact the tax assessment office and they adjust this ratio in the future is there anyway for this to be corrected in the future? Thank you in advance.
