The property tax bill is used for one thing only by the turbotax program. That is to determine what percentage of your cost basis gets allocated to the land. That's it. None of the numbers on the property tax bill get reported to the IRS. That's because there is a difference between tax value and fair market value. Typically, I see tax values average about 30% lower than the fair market value. But the difference between the two can vary much more significantly, depending on the location of the property.
When it comes to taxes, you use the *LOWER* of either the original purchase price, or the FMV at the time of conversion, for depreciation.
It is more common for the original purchase price to be lower than the FMV at the time of conversion. The tax bill is used *ONLY* to determine what percentage of the cost basis used, gets allocated to the land since land is not depreciated. For that, you use the most current tax bill available. If the most current available is from 10 years ago, then use it. For most, the most corrent tax bill available will be the one they received/paid in the prior tax year.
