TT Land Value and Improvement Value for my new rental question

[rosetax13-]

I inherited a home in 2021, I rented out in 2023. TT is asking for Land Value and Improvement Value from my "tax bill". 

In 2021 I did an Appraisal Upon Death & it was appraised at $680.

Between 2021 & 2023 I put in almost 30k in improvements.

I have a 2023 Tax Statement with "Primary Limited Values" that includes the "Land/Building" total only, not broken out, total $670. 

On the same tax statement it also shows "Secondary Full Cash Values" for "Land/Building", not broken out, 1 mill.

What amount do I put into the Land Value space and what amount in the Improvement Value space?

[KrisD15 · Accepted solution]

You will enter a value for the building and the land.

The value will be the appraised value on the date you inherited it plus improvements. 

The improvements you made will be added to the basis of the building. 

You won't use the tax statement if the value is larger since you must use your cost or Fair Market Value, whichever is lower. 

If you are unsure of how to brake out the building and land from your total value, ask a local real estate agent for help. They should be able to give you an idea of what the rate of vacant property to improved property value is in that area. You can use that same RATIO. You can also use an appraiser, but again, you are just looking for a ratio, you can't change the value unless the value has decreased. 

Remember that land does not depreciate and when the rental is eventually sold, if any depreciation is recouped, that amount is taxed as Ordinary Income. 

Any improvements you add going forward are added as new, separate assets and depreciated separately.