I valued the condo at $240k per the appraisal
For depreciation purposes, you do not use appraisal values. You use the "LOWER" of what you paid for the property when you originally purchased it, or it's FMV on the date placed in service. Most likely, what you paid for the property is the lower value and is what you would use for depreciation.
The below information is provided for other readers, as they may find it beneficial.
Depending on a number of factors, the program may or may not ask you for all the closing costs you paid.
Now on the screen where you enter values you have two boxes.
COST: This is what you paid for the property in it's entirety.
COST OF LAND: the amount of what you entered in the COST box, that is allocated to the land.
To determine the amount to allocate to the land, the program will use the tax appraisal values from your most recent tax bill. It will *not* use the tax values for depreciation. The program will figure out what percentage of the tax value is assigned to the land. Then the program will use that percentage to figure what percentage of the amount in the COST box gets allocated to the land and entered in the COST OF LAND box.
Typically, any costs associated with acquisition of the property are added to the cost basis. An example would include the title transfer fees paid at the courthouse to remove the seller's name from the deed and replace it with the buyer's name.
Costs associated with acquisition of the loan are amortized and deducted (not depreciated) over the life of the loan. An example would include loan application fees, as well as property survey fees if a property survey was required by the lender as a condition of loan approval.
