@Carl wrote:
Got it, so the depreciation cost basis would be: $548,934, right?
Not quite, as the value of the land is never depreciated. But that is the amount you enter in the "COST" box. Then you enter the value paid for the land in the "COST OF LAND" box. The program (not you) will subtract the cost of the land from your total cost, and that will be the amount to be depreciated over the next 27.5 years.
@jennifervphan
I think it's unclear why you want to calculate the cost basis. If it because you are planning to sell the house, your figures are correct.
If you are placing the property in service as a rental property (or home office, or other business use) then Carl is correct that you have to allocate some of your basis to the value of the land. You might get some tips on this from a real estate appraiser, your tax assessor's office, or a real estate professional in your area. Your total cost basis is as you calculated, but only part of that is allocated to the house and subject to depreciation.
