I usually use 20% for land since that is what the insurance
company commits to who is willing to pay 80% of the purchase
price if the property is total destroyed. This has prevailed
at audits. Of course if the rental unit is an upstairs condo
with only the bottom of a stairway on the ground and an
outdoor parking space, a lower % for land could be
justified. I once saw a new rental property of 4 units
assessed by Los Angeles County at $100 for the building and
$249,900 for the land. I offered to buy the building and
move it to my house. The client wouldn't take the offer.
What do assessors know anyway?

Linda Dorfmont E.A., CFP, CSA

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<jlficken[at]gmail.com> wrote:

- quote -

It's expensive to get an actual real estate appraisal, which
could be used here, so I'd take the quick and dirty
approach.

Look at your property tax bill, and see what percentage of
the total assessed value is the land. Use that percentage
to determine cost basis of the land.

--
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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jlficken[at]gmail.com wrote:

- quote -

You would typically have an appraisal. Short that, your
local tax appraising district will have the assessed value
for the land and improvements stated separately. You could
use that ratio to split them out. It is ironic because the
HRB commericial touting its audit defense says "ask the
box".

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<jlficken[at]gmail.com> wrote:

- quote -

You need to segregate the cost as the land cannot be
depreciated

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > >
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<jlficken[at]gmail.com> wrote

- quote -

If you can, find out what a vacant lot (of the size of
yours) in that area would have sold for back in 2004.
Otherwise make a *best guess* as something is better than
nothing. My feeling is that the land would fall in the $5k
- $8k range. If it's worth the cost (and it reeally isn't)
you could hire an appraiser to crunch the numbers.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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<jlficken[at]gmail.com> wrote:

- quote -

One possible source is your real estate tax bill. It may
allocate your valuation between land and improvements. You
could then apply that ratio to your purchase price.

Not that you asked, but you'd be wise to abandon TaxCut for
this year and hire a preparer. The bulk of the fee would be
deductible on your 2007 Schedule E, and once everything is
set up, the later years run pretty smoothly.

--
Phil Marti
Clarksburg, MD

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I bought a house in 2004 for $88,500 including the land. I
am now renting it this year and am confused on what to list
for the 'Total basis for the property' and the 'Basis for
the land' in H&R Block Tax Cut software. I didn't know it
would be so confusing. I have no idea what the land is
worth so I don't know what to put. Any help would be
greatly appreicated.

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