Thanks Julie -
To make sure I'm understanding....let me ask my question differently....
Adding up all my capital expenses from the 1985 purchase of home and land, the tear-down costs to build new house, the cost of building the new house, the cost of the construction loan, and the costs of moving from a construction loan to a conventional loan....totaled about $368,000.
To obtain the March 1997 conventional loan, an appraisal was required which came in at $465,000.
So...should my basis as of 1997 be: 1) $465,000, or 2) $368,000, or 3) $368,000 plus any increase value related to only the land? And if the answer is #3, should I be able to rely upon the 1997 appraisal's valuation of the land, or should I turn to the county tax appraiser's # (which of course is usually below market value.)?
THANKS AGAIN!
