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!
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Yes, assuming that is a legitimate appraisal.
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.
Thanks @tagteam! Just to clarify, in the above screenshot, can I use ($938,233-$565,00 = $373,233) as cost basis ?
Yes, assuming that is a legitimate appraisal.
Thanks @tagteam Appreciate your help.
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