Thanks, Carl. But this is not inherited property. This is my parents' home that has been turned into a rental because my dad passed away and my mom is living with us. So she owned the house jointly with my dad since 1978. I found an example in Pub. 527 that showed a house bought years earlier. The cost basis was that original cost minus that original land value plus any improvements. So my thought is that I take the purchase price minus the land value in 1978 which I calculated at 1/3 of the original purchase price. This is the basis Mama will use (plus improvements plus 50% of FMV on date daddy died) for depreciation purposes.
Is that correct?
I really appreciate your continuing to help me. I want to do this rental property form correctly the first year so I don't have any issues with it later (per your good advice!)
