Investors & landlords
Use the fair market value (FMV) of the land and building on the date of death.
I assume that you owned 50% of the property and you inherited 50% of the property. So if the original cost of the asset was $100,000 and the stepped up valuation is now $300,000, only the inherited 50% of the property will be stepped up. The stepped up basis will computed as follows:
Original cost of inherited portion $50,000
Stepped up value of inherited portion ($150,000 - $50,000) = $100,000
Value of inherited portion $150,000
Original cost of your 50% ownership $50,000
New basis of property $200,000
Enter the asset into TurboTax with the original date placed in service and reporting the prior depreciation reported for previous years. TurboTax will calculate subsequent depreciation expense based on the new valuation from the new asset entry. Form 4562 Depreciation and Amortization Report from your 2021 tax return will have all of the information that you need.
If all looks good, then remove the original asset(s).
