OK, so to take this to an insane level what if my rental house is fully depreciated and I sell it for $500k.....years ago I allocated $50k to land and $200k to the building. Like you my land has appreciated substantially and now has a FMV of $400k. Can I allocate $400k of the sales price to land and $100k to the building? What happens to the other $100k worth of depreciation deductions I took over the years?
