Original Price for Rental Property

[vigilj]

My Father in Law rents a property that he inherited from his deceased wife. She had purchased it in 1986 but no record of the original sale price can be found. What value should we use? Current Assessed value on county website?

[KrisD15]

If your Father-In-Law INHERITED the property, his basis would be the Fair Market Value on the date of death. 

You can use the assessed value or ask an Appraiser or real estate professional. 

Remember to separate the value of the land and the value of the building/improvements. 

Land will not depreciate, the rest will. 

Keep track of Depreciation (Form 4562) as this may be needed when the rental is sold. 

[vigilj]

Thanks! If I use the assessed value at time of death, should I use what the county shows as the "Full Value" of the home or the  "Taxable Value" of the home?

[KrisD15 · Accepted solution]

Full Value, 

there may have been Homestead or some other tax relief on it which lowered tax, but should not be factored in when determining value.