Hi,
When trying to allocate the sales price for rental properties, I have trouble finding the good reference about how to allocate the sales price of land vs improvement? Should I use the improvement/land breakdown from the tax assessor when I purchase the property or on the year sale?
For example:
When I purchase the property in 2010, the tax assessor has the following allocation:
Improvement: $75,000
Land: $25,000 (25% of total value)
When I sell the property in 2021, the tax assessor shows the following allocation:
Improvement: $140,000
Land: $6,000 (30% of total value)
House is sold for $250,000
How should I allocate the sales price of $250,000, should I use 25% as the land value (the allocation in 2010) or the 30% as the land value (allocation in 2021)?
Thank you!
