how do I find out the land value?
It is perfectly acceptable to use the "percentage" of the values on your most recent property tax bill. Understand that you do "not" use the actual values on your property tax bill for tax purposes. You only use the property tax bills value to determine what percentage of your cost-basis to assign to the land, and what percentage to assign to the structure. Example:
I'm picking numbers out of thin air, just to make the math easier to follow
Details on my latest property tax bill:
Value: $100,000
Improvement Value: 80,000
The value is the entire total tax value (not fair market value) of the whole property.
The Improvement value is the tax value of the structure on that property.
So with simple math we can see that the value of the house is $80K and the land is $20K. Therefore, the land is 20% of the total value.
Now for depreciation purposes I have to use a cost basis that is the "LOWER" of what I actually paid for the property, (plus what I paid for any property improvements) or the fair market value (FMV) of the property on the date I placed it "in service" as a rental. Nowadays, it is not common for the value of a property placed in service in 2020, to be less than what I paid for it (plus what I paid for any property improvements before placing it in service). So my original cost (plus improvements if applicable) will be the cost basis used for depreciation.
I originally paid $200,000 for the property when I purchased it in 2003. Using my percentages from the property tax bill, I"m going to assign 20% of that ($40K) to the land, and the remaining 80% ($160K) to the structure.
If I'm ever questioned on this by any taxing authority, I have a copy of the tax bill (which was my most recent "at the time") to show how I arrived at those values.
Also, only remember the month of purchased not exact date, is it ok?
Yes and no. Depends on what you want to claim. You "should" have a copy of the closing statement that was provided to you by the closing agent on the date you closed on the purchase. (original purchase date, not the refi date if you ever did a refinance of this property.) If you don't, then your lender "should" be able to provide you a copy of that closing statement. You can expect to be charged a small fee for that. That closing statement will have the exact date on it, that you closed on the sale.
It also helps tax-wise if you know things like what your closing costs were, points paid, and a few other tid-bits that can add up in your tax favor.
