For when the property was sold - You can check with the county tax assessor office to see if they have an up-to-date break down of the property between land and structures or you can get an appraisal of the property.
For when the property was purchased - here is one way to determine the original cost of your
land. You will need
- a copy of
your property tax bill
- the original
cost of what you paid for your property in total
Step 1
Find your cost basis
by adding your home's purchase price to the closing costs that you paid when
you bought it, excluding any loan-related costs. For instance, if the house and
land together totaled $150,000 and you paid another $3,000 in closing costs,
your basis would be $153,000.
Step 2
Divide the assessed
value of your house by the total assessed value of the house and land. For
instance, if your county assessed your home at $125,000 and the land at $25,000
for a total assessed value of of $150,000, you would divide $125,000 into $150,000
to find that the house represents 83.33 percent of the total value of your
property.
Step 3
Multiply your cost
basis by the percentage share of the house to find the value of the house. With
a house that represents 83.33 percent of the total property's value of
$153,000, the house would be worth $127,495
Step 4
Subtract the house's
value from the total value to find the land value. If the total value is
$153,000 and the house's value is $127,495, then the land's value would be
$25,505.
Tip
- If you have a copy of an
appraisal, and it breaks out the house and land values, you can also use
it to establish the allocation of value between the house and land. The
Internal Revenue Service's rule of thumb is that your allocation should be
based on fair market values however you calculate them. You can also use
an allocation that appears in your purchase agreement, if it has one.
