Which property statement do I use for cost basis of a new rental, the latest statement or the statement when the property was purchased (7 years ago)?

For determining the cost basis of your new rental property, use the statement from when the property was purchased 7 years ago. Here is a summary of how to account for the cost basis.

1. Original Purchase Price: Start with the amount you paid for the property.
2. Add Capital Improvements: Include costs for significant improvements (e.g., new roof, kitchen remodel).
3. Adjust for Depreciation: Account for any depreciation if the property was used for rental purposes.

For more details, you can check out TurboTax Guide on Selling Rental Property and IRS Publication.

Can you clarify?  Your Cost Basis is your Cost, not the valuation on a property tax statement.

Or are you trying to get an estimate of the cost of the building versus the land, based on the ratio that is on the property tax statement?

Was the property personal use and is not being converted to a rental (or using a Home Office)?  As the value of the home increased since you purchased the home?

This is for the depreciation calculation for a new rental, where we converted our personal home to a rental. Since the IRS does not consider land depreciable, TurboTax asks me to enter the values from my property tax bill to adjust the cost basis accordingly. I want to know which tax bill is to be used.

The city or county have a current tax assessment for your rental property.  There will be both a land and building value.

1. Land: To arrive at the cost basis for each take the land assessed value and divide it by the combined total of land and building value. This equals the percentage of your cost basis that should be land value.  
2. Building: Likewise the building value will be divided by the combined total of land and building to arrive at the building percentage.  
   • When the percentages are added together they should equal 100%.

@espencerito1