@JohnB5677
Hello!
I am putting a personal residence into use as a rental property this year that was bought in 2016.
My purchase price is way below the current FMV so I will be using my purchase price for cost basis.
I am going to use the county tax assessment percentage to calculate the land value. HOWEVER the percentage between land and building changes every year. Would I use the current year's assessment or the assessment from 2016 to calculate the land value?
Publication 527 States:
"The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it. If you aren’t certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes."
Based on this I want to say I will use the 2016 tax assessment percentage for my calculation. But I want to be sure!
Thank you!
