I can’t take depreciation?

[Ben Bradmon Jr]

I bought a 3/1 SFH for $22k put $6900 in rehab but the county has the land valued at $32,400. So I can’t take depreciation? I understand that it is the purchase price minus land value divided by 27.5 gives me what I can take each year. It was appraised at $63k so can I use this? The county has it at 69k for land and building.

[Jon Holdman]

One common rule of thumb is to take 80% of the purchase price for improvements and 20% for land.

Another way to do it is to look at the county's values for both land and improvements and use those to determine the percentage.  With your numbers ($69k total, $32,400 for land) you have 47% for land and 53% for improvements.  So use 53% * $22K for the starting point for improvements.  Then deal with the rehab costs.  Some of those might be able to be depreciated faster than 27.5 years.