Land Value for New Rental Property

[tuffy007]

I am setting up a new residentail rental asset and entering the correct land value and structure value from the purchase on the "Enter Property Tax Values" screen.  Turbotax overrides my land value and enters another number.  How do I correct or override the TT calculation for land to the amount I know to be correct?

[ColeenD3]

The only reason why I think that would happen if both the land and building amounts are greater/lesser than the total amount. Check your figures and see if that is the case.

@tuffy007

[AmeliesUncle]

The "Enter Property Tax Values" screen just calculates the RATIO to determine the land value.

For example, if you property tax valuation says the total value is $300,000, which is $200,000 for the building and $100,000 for the land, the programs calculates that 1/3 is for the land.

But then let's say you entered that you paid $360,000 for the home.  The program will then assume that 1/3 of that is for land, and enter $120,000 for the land value.

Does that make sense?

[AmeliesUncle]

So if you know the ACTUAL land value, you should not be entering anything on that "Enter Property Tax Values" screen.

[KrisD15]

The tax assessment is not always accurate.

If you value the land in a different but reasonable way, keep the documentation for determining that value with your tax file. 

@tuffy007

[amoshman]

Your answer does not tell me where to enter this information if not on the "Enter Property Values" screen.

[Carl]

I am setting up a new residentail rental asset and entering the correct land value and structure value from the purchase on the "Enter Property Tax Values" screen.

The program is asking for ***PROPERTY TAX*** values. Not fair market values or any other type of value on that screen.

The program only uses the the values from your latest tax bill for the sole and only purpose of determining what percentage of your "actual" cost basis gets applied to the land. The tax values themselves are "NOT" reported anywhere on any tax return.

So if the tax bill shows a tax value of $100,000 with $30,000 of that value assigned to the land, then that's 70% of your total tax value that is assigned to the structure and the remaining 30% assigned to the land.

If you actually paid $200,000 for the property, then that's your actual cost basis. The program (not you) will assign 70% of that ($140,000) to the structure and the remaining 30% ($60,000) to the land. It is only the structure value that gets depreciated.