Why isn't the land value removed properly to reflect an accurate cost basis for rental property?

Forum|Forum|7 years ago
April 10, 2018
2 replies
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I bought a home for $670K and the land value is $430K. Why does Turbo Tax tell me that my rental property will depreciate only $3,500 for the next 27 1/2 years? Shouldn't it be $240,000. (I entered the land value on the "Enter Property Tax Values" Screen under Wages & Income tab for Property Profile)

Did I do this correctly?

Any help would be appreciated.

PaulaM

Employee

When did you place the property in service? The figure generated is likely not for a full year's depreciation.

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Carl11_2

Employee

Sounds to me like $3,500 is your first year depreciation figured on a mid-month convention. I figure you placed it in service in July 2017 for a first year depreciation of $3,500. That amount is close enough for me to call correct, to properly depreciate $240K over the next 27.5 years.