I bought a rental property (A) in 2020 and the county assessed a land value of $35,000 and improvements of $71,000. Those are the values I entered initially in TurboTax to calculate my depreciation. However, in 2021 the assessments change drastically, $26,000 land and $116,000 improvements, for what reason I have no clue. At the time I didn't file a protest to the county assessor, but now it seems to me that my depreciation is significantly less than it would be with the new ratio of land/improvements (not to mention the higher property tax). Can the depreciation schedule be changed? Is it worth doing?
As an aside, I have another similar rental property (B) in the same neighborhood, and the assessments on that one have moved up very slightly, but the ratio of land to improvements has remained about the same. Makes me wonder if property (A) was incorrectly assessed.
Annual assessments of property have no effect on your historical basis in the land or building for tax purposes. Do not change what you have entered for your rental assets under Assets/Depreciation. Depreciation expense will be the same every year for the life of your rental asset.
Annual assessments of property have no effect on your historical basis in the land or building for tax purposes. Do not change what you have entered for your rental assets under Assets/Depreciation. Depreciation expense will be the same every year for the life of your rental asset.