Thank you. This info is helpful. You have the situation grasped well, but just to clarify... The 40 land/60 improvement percentage was my parents' property tax they had for 25 years. This was not a new assessed tax value after death as I never received any property tax reassessment (inherited exclusion I assume). Even after I acquired the full property, I did not receive a new tax assessment from the county for over a year. I initially had nothing else to go by for my starting basis, so I applied the old 60% improvement to the new value of $560k = $336k. The county reassessment was triggered because of my change in ownership, but received after I'd filed previous tax returns. The new county land/ improvements for my ownership went to 60/40% respectively, thus making 40% of the $560 now $224k.
I understand my 1/3 of death appraisal combined with the amount I paid my siblings, the higher basis benefits, and your point of my depreciation normally continue as is. But the way I started the basis was with the limited info I had at the time.
Since the county’s reassessment was the result of my new ownership (even though it took so long), and the fact I’m depreciating $112k more than the county says it’s worth, is this an issue I need to address?
Will depreciation recapture eventually happen the same regardless of these discrepancies and therefore I shouldn’t worry about it?
I didn’t know if there was any cross-checking by the IRS on these values or issues if the wrong basis was used... be it unintentional.
Thanks again!
