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Do I determine the the cost basis for the home I've started renting out based the most recent refinance or my original purchase statement years ago?

 
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2 Replies

Do I determine the the cost basis for the home I've started renting out based the most recent refinance or my original purchase statement years ago?

depreciable basis it's the lower of fair market value the date you put it up for rental or your cost including improvements.  the value of the land can't be depreciated

 

Cynthiad66
Expert Alumni

Do I determine the the cost basis for the home I've started renting out based the most recent refinance or my original purchase statement years ago?

The property's basis usually equals the original purchase price plus the cost of improvements minus any depreciation. This includes depreciation claimed 1) from having a deductible home office while you lived there, and 2) after you convert the property into a rental. Rules for depreciation and loss on sale purposes.

 

Land is not depreciable so land should be deducted from Basis for depreciation purposes.

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