Re: DEPRECIATION SCHEDULES ---LAND VS STRUCTURE

Re: DEPRECIATION SCHEDULES ---LAND VS STRUCTURE by Garry on February 5, 2019 @20:27

Dave, sorry I haven't gotten back to you until now. I had to check some things out on my properties about values. I have 20 SFHs I rent out, with current assessed values of $50,000 - $100,000 each. The land values only on those homes were all running from 17% to 25% of the total AV fo local property tax purposes. When I looked at what I had put down over the past 35 years for land values that I could not depreciate for IRS purposes, my land values were running between 13% and 21%, with most of them in the 15-19% range. It also looked like I was using the lower percentages of land value, on the properties that have small, postage-stamp lots with large houses on them, as opposed to the ones with regular sized lots.

I believe no one needs to worry about what they are using for land value, as long as they are close to that magical 20% value, and the IRS never audits you. Obviously, small lots are worth a lot less that regular/normal sized, or large lots. But it can be the other way, too. A person could own an acre of ground, with a small, older house on it, that they rent out. In that case, the IRS may want that person to use a 50/50 split on land/building value, instead of a 20/80 split.

No matter what percentages are used, eventually, when you go to sell the rental, you will have to "recapture" all that depreciation that you took over many years. I will be going thru that with my CPA next month. I sold a house in Oct. that I had owned for 40 years. I was totally depreciated out on the building.

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Re: DEPRECIATION SCHEDULES ---LAND VS STRUCTURE by lpadave on February 6, 2019 @14:47	[ Reply ]

Thanks Garry......its been a while since I've put a new property into rental service,...so I was curious as to what's out there now. I've always used 80/20 irrespective of what the county assessors say. and felt comfortable with that as have the realtors, lawyers and Cpas . The recapture is indeed a bxxxh,... And I'm finding that 1031's,.... ain't what it used to be. Especially in the big cities. There's just too much foreign money coming in,...and that money just doesn't care what they pay.. I've always believed that 1031 was supposed to be the gravy on the deal,....

Re: DEPRECIATION SCHEDULES ---LAND VS STRUCTURE by lpadave on February 6, 2019 @14:47	[ Reply ]

Thanks Garry......its been a while since I've put a new property into rental service,...so I was curious as to what's out there now. I've always used 80/20 irrespective of what the county assessors say. and felt comfortable with that as have the realtors, lawyers and Cpas . The recapture is indeed a bxxxh,... And I'm finding that 1031's,.... ain't what it used to be. Especially in the big cities. There's just too much foreign money coming in,...and that money just doesn't care what they pay.. I've always believed that 1031 was supposed to be the gravy on the deal,....

Re: DEPRECIATION SCHEDULES ---LAND VS STRUCTURE - Landlord Forum thread 359011