Real estate rental basis


N

ngemail

Bought a home in CA (community prop) 15 years ago. Was
divorced 10 years ago and got ownership of the house in the
settlement. Lived in it until 2003, at which time I moved
out and switched this house to a rental.

How do I figure the basis for depreciation purposes?

Original cost was about 350K including land (60K?) Value at
time of divorce was maybe 400K.

Thanks
 
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G

Gene E. Utterback, EA

ngemail said:
Bought a home in CA (community prop) 15 years ago. Was
divorced 10 years ago and got ownership of the house in the
settlement. Lived in it until 2003, at which time I moved
out and switched this house to a rental.

How do I figure the basis for depreciation purposes?

Original cost was about 350K including land (60K?) Value at
time of divorce was maybe 400K.
Original cost plus any improvements up till you placed it in
service less the cost of the land - OR - the fair market
value when placed in service IF LESS THAN your actual cost.

Gene E. Utterback, EA
 
A

Arthur Kamlet

ngemail said:
Bought a home in CA (community prop) 15 years ago. Was
divorced 10 years ago and got ownership of the house in the
settlement. Lived in it until 2003, at which time I moved
out and switched this house to a rental.

How do I figure the basis for depreciation purposes?

Original cost was about 350K including land (60K?) Value at
time of divorce was maybe 400K.
Use the lower of fair market value at time you placed the
property into service as a rental, or the adjusted cost
basis at that time.

Only the building, not that land, can be depreciated, so
allocate basis between building and land.

So if no improvements, land had basis of 60 and building had
basis of 290 and you would use the 290 for depreciation.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
 
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D

David Woods, EA, ChFC, CLU

ngemail said:
Bought a home in CA (community prop) 15 years ago. Was
divorced 10 years ago and got ownership of the house in the
settlement. Lived in it until 2003, at which time I moved
out and switched this house to a rental.

How do I figure the basis for depreciation purposes?

Original cost was about 350K including land (60K?) Value at
time of divorce was maybe 400K.
Lower of cost or market value.
 

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