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Level 1

How do I find out the land value to fill out the real estate property depreciation info? I no longer have the documents, and I am unable to go to the county office.

I got stuck at the step of filling out real estate property depreciation info. It is a Colorado, Jefferson County property that I bought in 2010. I can not visit the county office to get records because I moved to another country. Tried the county's online assessor property record search. Not sure if I looked at the wrong place, but I could not find the info there. Please help.
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Accepted Solutions
Level 7

How do I find out the land value to fill out the real estate property depreciation info? I no longer have the documents, and I am unable to go to the county office.

The taxable value probably does not indicate the value of the land based on your statements.

If you do not have any information to determine land value, the IRS auditor will not have any information either.

Percentage allocation is one way to make a decision. 

If your personality is aggressive, you may want to allocate 80% of the value to the building and 20% of the value to the land. If your personality is conservative, you may want to allocate 60% of the value to the building and 40% of the land.

Separating cost of land and buildings.   If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it.

  If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes.

Example.

You buy a house and land for $200,000. The purchase contract does not specify how much of the purchase price is for the house and how much is for the land.

The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land.

You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land.

Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000).

I’ve included a link to the IRS website for your reference:  Click here for Residential Rental Property information.



4 Replies
Level 7

How do I find out the land value to fill out the real estate property depreciation info? I no longer have the documents, and I am unable to go to the county office.

The taxable value probably does not indicate the value of the land based on your statements.

If you do not have any information to determine land value, the IRS auditor will not have any information either.

Percentage allocation is one way to make a decision. 

If your personality is aggressive, you may want to allocate 80% of the value to the building and 20% of the value to the land. If your personality is conservative, you may want to allocate 60% of the value to the building and 40% of the land.

Separating cost of land and buildings.   If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it.

  If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes.

Example.

You buy a house and land for $200,000. The purchase contract does not specify how much of the purchase price is for the house and how much is for the land.

The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land.

You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land.

Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000).

I’ve included a link to the IRS website for your reference:  Click here for Residential Rental Property information.



Level 1

How do I find out the land value to fill out the real estate property depreciation info? I no longer have the documents, and I am unable to go to the county office.

Wow! Thank you for this very detailed explanation! Just two more questions:

The assessment from the county does not specific the land from the building... Not sure if it was normal. I have not been able to find this information in their online database either. However, I found the tax return for the year when the property was purchased. It states the land value and the property value. Is it ok that I use it as a reference for the percentage?

If IRS had an issue with my report of the sale, would they be forgiving if I told them (the truth) that I could not find any other data other than the old tax return? (A bad divorce. Unable to retrieve any other documents from ex.)
Level 7

How do I find out the land value to fill out the real estate property depreciation info? I no longer have the documents, and I am unable to go to the county office.

Yes, you should use the original figures from the tax return you found.
Level 1

How do I find out the land value to fill out the real estate property depreciation info? I no longer have the documents, and I am unable to go to the county office.

For Sacramento City, CA  you can find the Assessors value here. (<a rel="nofollow" target="_blank" href="http://assessorparcelviewer.saccounty.net/jsviewer/assessor.html">http://assessorparcelviewer.saccou...) . Perhaps other cities too have similar online resources