Rental Property Depreciation - Appraisal Report VS County Assessment

[anxsa]

Hi All,

  I purchased my home in 2019 however put it as a rental only in 2021. From 2019 county records, land is 86% of the total value of the property which is not realistic. I do have a home appraisal report from 2019 as part of the original purchase, which allocates land to be about 60% of the total value. Am I OK to use the appraisal report as my cost basis? Does this have any reasonable standing in case of an IRS query (as to why I am not using county's numbers)?

Here are the numbers from Appraisal report, in case it helps to do a deep dive - https://prnt.sc/5UtpzLTG66JW

Thanks!

[Anonymous_]

Ideally, you should have a recent appraisal to determine fair market value at the time of conversion.

However, you can use the land/structure allocation.

[anxsa]

Thanks @Anonymous_! Just to clarify, in the above screenshot, can I use ($938,233-$565,00 = $373,233) as cost basis ?

[Anonymous_ · Accepted solution]

Yes, assuming that is a legitimate appraisal.

[anxsa]

Thanks @Anonymous_ Appreciate your help.