>>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.
I think I got it now.
let's say a house was brought for $500,000 back in 2000.
current property tax bill from 2022 say land value is $20000(200K) and improvements value is $490000(490K). TurboTax uses that to calculate improvement ratio is 490000/(200000+490000)=~0.71.
Improvements value (to be depreciated in 27.5 years) of the house would be calculated as 500000*0.71=355000.
Is that right?
If $20000 (20K) was spent for remodeling in 2000, that would be added on top of the purchase cost of $500000. Wait, as it's for improvements, it should be added to the $355000 directly, right?
