How would you determine depreciable basis on an all-TOH MHP?

[Joe Hamner]

Hi folks,

I'm close to getting my first MHP under contract and am trying to understand whether my project will have some of the tax advantages that park owners enjoy due to the 15  yr depreciation schedule on certain infrastructure assets.

Here's the issue; I'm buying the park for the current assessed land tax value and because it's a TOH only park with no buildings, the tax assessment doesn't reflect any land improvements (that would otherwise provide a starting point for determining a reasonable allocation between what's depreciable and what isn't (ie., the land).  Obviously there is great inherent value in the infrastructure (paved roads, upgraded septic systems, water/sewer lines, etc.) so how is a reasonable depreciable basis calculated from the outset?

If my purchase price is the same as the assessed land value, will I have any depreciable basis going into the project in the eyes of the IRS? I understand that future capital improvements would be depreciable but if none of the value of the existing infrastructure can be applied towards the basis, it obviously reduces my after-tax returns.

If the answer to question above is no, can I effectively create a defensible basis by getting a cost segregation done that breaks out the true value of the infrastructure or, would the appraisal suffice since the appraiser would presumably provide a breakout of the infrastructure value? 

For the purpose of the questions, if the purchase price of the park is $1M and current assessed land value is $1M (despite the fact we know many assessments are artificially high the for tax gains of the municipality and do not reflect the true market value), I guess I'm essentially asking if / how I create a case to lower the value of the land and apportion the balance to "infrastructure", and thus gain a depreciable basis from day one (or am I dreaming)? 

Thanks!