This is my first rental, so this is the first time depreciation will be part of my taxes.
First, my understanding of calculating the value of just the home, not the land, is to start by looking up the latest tax assessment, which breaks down the value of land and the home. I would then calculate what the percentages are for the land and home from that and then use those percentages against the purchase price, to get just the home's value. Is that correct? So if the tax assessment home price is 80% of the overall value, I would take 80% of the purchase price as the home's value for depreciation.
Then, I am allowed to add any improvements I made to the home to the purchase price. Is that correct? I did all the work myself, so I didn't pay for labor. I am wondering if the value of the improvements is greater than the money I put into them.
Along those lines, I attempted to get PMI removed about a year before it became a rental, which required an appraisal. Can I use that value (subtracting out a % for the land) when entering in the value for depreciation?
