@Anonymous_ wrote:
@Opus 17 wrote:
....You might get the value of the land from the tax assessor....
I'm not sure why the value of the land is even relevant since the property has one PIN (property tax ID number) and only the structure is depreciable.
The basis of the structure needs to be determined and then entered as a rental asset.
Right. But the value of the land might be useful in determining the cost basis of the house.
I'm assuming the property was bought and placed in service right away, or the property has increased in value since purchase, so the cost basis will be the purchase cost rather than the FMV.
For example, suppose the entire property cost $250,000. If the land was worth $25,000 at the time, then the cost basis of the structures combined is $225,000. That is the amount that must be allocated, perhaps on a square foot basis or something else. In other words, if the rental house is 40% of the property as mentioned, the cost basis of the house would be 40% x $225,000 = $90,000, rather than 40% x $250,000 = $100,000.
I hope my thinking makes sense.
