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anxsa
February 4, 2024
Solved

Rental Property Depreciation - Appraisal Report VS County Assessment

  • February 4, 2024
  • 1 reply
  • 0 views

Hi All,

 

  I purchased my home in 2019 however put it as a rental only in 2021. From 2019 county records, land is 86% of the total value of the property which is not realistic. I do have a home appraisal report from 2019 as part of the original purchase, which allocates land to be about 60% of the total value. Am I OK to use the appraisal report as my cost basis? Does this have any reasonable standing in case of an IRS query (as to why I am not using county's numbers)?

Here are the numbers from Appraisal report, in case it helps to do a deep dive - https://prnt.sc/5UtpzLTG66JW

 

Thanks!

    Best answer by Anonymous_

    Yes, assuming that is a legitimate appraisal.

    1 reply

    A
    Anonymous_
    Employee
    February 4, 2024

    Ideally, you should have a recent appraisal to determine fair market value at the time of conversion.

     

    However, you can use the land/structure allocation.

      A
      anxsaAuthor
      February 6, 2024

      Thanks @Anonymous_! Just to clarify, in the above screenshot, can I use ($938,233-$565,00 = $373,233) as cost basis ?

      A
      Anonymous_Answer
      Employee
      February 6, 2024

      Yes, assuming that is a legitimate appraisal.

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