The cost (basis) of an asset is the amount you paid for it, plus what you spent to acquire it, such as freight, installation, sales tax, and legal fees.
Select your property below to learn how to determine its cost.
The cost is the lesser of the item's fair market value or your basis for this property (how much you've paid for it, including whatever you spent to acquire it) at the time you started using it for business.
You'll need to sign in or create an account to connect with an expert.
Based solely on the information in your question, the rental property depreciation would be based on $X (minus the cost of the land) because it is lower than $X + $10,000.
That being said, when you enter the information into TurboTax in the Rental Income and Expenses section of your return, you will be asked to enter the original cost of the property along with any improvements or other items that would change the basis. You will also be asked to enter the fair market value of the property at the time it was converted to a rental property. Then, TurboTax will determine which value to use for the depreciation calculation. You do not have to decide which is the correct value.
Based solely on the information in your question, the rental property depreciation would be based on $X (minus the cost of the land) because it is lower than $X + $10,000.
That being said, when you enter the information into TurboTax in the Rental Income and Expenses section of your return, you will be asked to enter the original cost of the property along with any improvements or other items that would change the basis. You will also be asked to enter the fair market value of the property at the time it was converted to a rental property. Then, TurboTax will determine which value to use for the depreciation calculation. You do not have to decide which is the correct value.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
taxquestion222
Returning Member
dlarzik
Level 1
MellowStudent
Level 1
nealtapia
Level 1
saalves2424
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.