The 2014 tax valuation of the land was $26,500 and of the building was $95,900.
Understand that the tax valuation are "NEVER" used on the tax return. The sole purpose of the tax valuation is to determine what percentage of the price you paid, gets allocated to the land. Period. That's it. Nothing else.
So with a total tax valuation of $122,440, only 22% of that was allocated to the land.
Therefore, with your *ORIGINAL* purchase price of $22,800, 22% of that is $5,016 for the land. That leaves $17.784 for the structure. So in the COST box you'll enter $22,800 and for "Cost of Land" enter $5,016.
For that initial entry *DO* *NOT* add or include your property improvements. The program will *NOT* do the math correctly for allocating land value. Add your property improvements as physically separate entries do they only add value to the structure, without affecting the land value.
You'll do a second asset entry for your property improvements with a "cost" of $140,000 and for "cost of land" you'll enter a ZERO.
This will give you the correct totals of $5,016 for the land, and $157,784 for the structure. ($140,000 plus the $17,784 of the original structure value)
I am thinking the refi costs and cost to get it livable would be entered under assets and get depreciated.
Overall so far, your total cost basis is $162,800 with $157,784 total for the structure and $5,016 for the land.
Now you said you put "part of the house" in service as a rental in 2019. Elaborate with details please. There is a possibility that your situation will cause the program to figure depreciation incorrectly and it will "NOT" generate an error. But it's still wrong all the same.
As for your refi costs, none of your refi costs gets depreciated. They get amortized and deducted over the life of the loan. Here's how that works.
- Cost associated with acquisition of the property are added to the cost basis and depreciated along with the property, over 27.5 years. Your refi doesn't have any property acquisition costs. (But the original loan to purchase does.)
- Cost associated with acquisition of the loan are amortized (not capitalized) and deducted (not depreciated) over the life of the loan. These are the only costs you will have associated with your refi.
