Determining basis on a new home

[JZ1964]

Dear Community, I purchased a new home to serve as a rental property in August 2019 and I'm trying to determine the basis for taxes.  The county property tax record does not list building value at this time and only notes the land value. 

Should I use the sales price of the home and then change next year when the tax record is updated to show building value?

Thanks!

[DianeC958 · Accepted solution]

No, it is best to record a value for land from the beginning.  Since you know what you paid for the home, including the land, and the county tax records have the land value you can record the home as the amount of what you paid for it less the amount the county tax records show for the land value.

[JZ1964]

Thanks Diane!

Do these building and land values stay locked at these numbers (assuming no physical changes to the property) going forward or can I adjust these dollar amounts next year when the  county adds building value to the property tax record?  Based on some internet examples I found it seems the value the country tax office places on your property is often lower than what you paid for it.

[LeonardS · Accepted solution]

Yes, the values used to establish the cost basis in your home will not change when the assessor's values change in the future.  Once you have used the assessor's land value at the time of your purchase you will not use any assessor's values in the future.