Calculating Cost Basis for Depreciation

[Mark S.]

Hi,

I acquired a 5-family property in NH in 2016. As you all know, one of the primary benefits of real estate investing is the tax advantages from depreciation. The purchase price of the 5-family was $265,000; however, the appraisal and P&S agreement did not include separate values for the building and land. In looking at the tax assessment, the value given for the land was almost 60% of the total property value, with the building at 40%. As such, my cost basis drops to roughly $106,000. The building is in great shape, so I feel like my cost basis is extremely low. Do I have any other options?