Thank you very much for this information. Actually, we believe the original construction cost + improvements is more than the FMV at time of conversion in 2016 (it's in a rural area where the housing market hasn't done well until recently). Of course, we naively didn't think to get a market value at the time of conversion. We do have the local authority tax value and we also have an appraisal that was done immediately after the house was built, although I imagine neither of those are acceptable to the IRS. The contractor who built the house is no longer in business and we have been taking depreciation on the property since 2016. Any other words of wisdom you can provide would be much appreciated!
