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Updated almost 6 years ago,
Form 4562 Land question
I have a non-residential rental property that I leased out last year and I am filling out Form 4562 for figuring out MACRS depreciation(39 years MM, SL). I assume the basis for depreciation does not include land. I was going to use a proportional ratio based on county assessment to figure out the value of the building. I think I got this correct so far. Please correct me if I got something wrong.
The question I have is, is there a place to report the total cost basis for the property including land? How will the IRS know when I sell the property how much the land was worth when I purchased it? How does appreciation of land figure into calculating depreciation recapture?
Also, I am confused about section 179 election to expense. Does it even apply to real property?
Thanks,
Ketan