@M-MTax There have been some who tell me that I would use the adjusted basis, but would apply the a new percentage for the building/land according to my appraisal. And continue with the existing depreciation schedule—i.e., if my mom started renting out the property in 2013, then for the 2021 tax year, I would continue depreciating it as if it were my 9th year on a 27.5-year schedule.
This causes some issues:
1. By applying a new structure/land % to my adjust basis means I'm not actually carrying over my mom's depreciation any more. For whatever reason, the appraisal valued the structure extremely low compared to the land compared to when my mother owned it.
2. all of the improvements we made over the years such as rebuilding walls and remodels used to be able to depreciate 100%, by doing this would go from being able to depreciate 100% to only 16% of it.
applying the above method, while my mom was getting 19K depreciated each year, my draft calculations shows that I would only be able to depreciate $6300 - a 3x difference.
I have heard others tell me to:
Split the basis into two parts: one for the gift portion (where I continue with my mother’s original depreciation schedule) and one for the purchased portion (where I would start a new 27.5-year depreciation schedule for just that part).
