Hello,
The depreciation does not works for me. I know that there is no option to avoid it but I am looking for ways to minimize the improvement value so that I can lower it. I bought my home in 2009 @ approx 300,000 and planning to give it for rental in 2025 . I found that people are recommending following ways on various discussion forums to calculate the land value:
1. Use the tax property vs land ratio from tax receipt and apply it to purchase price
Land value = 25% of 300,000 = 75,000 , improvement = 300,000-25000 = 225,000
2. In California , people use standard 50% as land value
Land value = 50% of 300,000 = 150,000 , improvement = 300,[removed] = 150,000
3. In more forum , people are comparing it with recent land sale and using land value from that reference
recent land sale for similar sized property in 2025 was 250,000
Land value = 250,000 , improvement = 300,000-250,000 = 50,000
#3 results in lower depreciation amount which works for me but is it ok ?
