rental property

gilar — Tue, 17 Mar 2020 21:56:26 GMT

When initially buying property, turbotax asks for cost of property (including land) and then has a separate line for land value. On subsequent years, where you enter the cost, do you then deduct the value of the land since it has its own entry or leave the cost as the total amount of purchase price?

Re: rental property

Rick19744 — Tue, 17 Mar 2020 22:12:20 GMT

Land is not depreciable.

So the value you attribute to the land, will remain the same until you dispose of the property.

Re: rental property

Carl — Wed, 18 Mar 2020 02:05:52 GMT

On subsequent years, where you enter the cost,

Once you enter the cost and cost of land data in that first year, you will never ever ever again be asked for that information on that property in a later year.

COST: what you paid for the property in it's entirety. This is usually the contracted sales price as listed on the sales contract you signed, as well as line 100 of the HUD-1 closing statement if you received such a statement at the closing.

COST OF LAND: the amount in the COST box that will be allocated to the land. Period.

When you subtract COST OF LAND from the amount in the COST box, the answer is the cost of the structure(s) on that land. That is the amount used to figure your depreciation each and every year, and your cost of that specific asset entry will never change.

Note that the program will also asks you for other costs that will change your end result of what gets depreciated. This is because:

- expenses you incur in the acquisition of the loan are amortized (not capitalized) and deducted (not depreciated) over the life of the loan. Example: loan application fees.

- Expenses you incur in the acquisition of the property are added to the cost basis, get capitalized and depreciated over time. Example: Title transfer fees you pay to the courthouse to change ownership of the property on the property deed, to you.

Re: rental property

gilar — Fri, 20 Mar 2020 19:41:45 GMT

Thanks!

Re: rental property

gilar — Fri, 20 Mar 2020 19:45:16 GMT

Thank you - very helpful.

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rental property

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