Hi @Critter-3 I can't thank you enough for your detailed answer!
To recap, the ratio of land and improvement I should use is the one I chose to allocate for depreciation along the years, what the tax assessor says about the ratio of land/improvement at the point of sale does not matter. If you have made addition improvements throughout the years (such as new roof or new flooring), we have to calculate the percentage of cost basis of each of the additional improvements using the following formula:
[ percentage of new roof ] = cost basis of new roof / (cost basis of the house + cost basis of the land + cost basis of the new roof).
Multiply the percentage of each additional improvements by the total sales price to get the sales price of the additional improvements, and the selling expense (such as agent fee) should be allocated using the same methodology.
Am I understand all of that correctly?
