Understand that the tax appraisal value is not used as the cost basis. Never. You only use appraisal values to determine how to divide your actual cost basis between land and structure.Typically, tax appraisals are on average, 30% less than the FMV of the property in the tax year the appraisal was done.
For rental property, you use the most current tax appraisal available on the date placed in service. If the tax appraisal shows a land value of $30,000 and a structure value of $70,000, then 30% of your actual cost basis is allocated to the land.
Therefore, if you paid $600, 000 for the property, 30% of $600,000 is $180,000. In TurboTax the amount you enter in the COST box would be $600,000 and for COST OF LAND you enter $180,000. It's really simple if you don't overthink it.
