All Forum Posts by: Brown Nathan

My question would be how well would a insurance valuation stand up against the tax valuation? Some of the appraisals I have give a replacement cost as well as a useful life. How well would a land sale of a lot near by stand up to a tax valuation?

Great reply thanks for the info. I do have a appraisals on a few of my properties. I don't know if they said a land and building value  My insurance is saying replacement cost would be above purchase price on most of my properties. What formulas are people using to calculate the land and building value?

I have always been using a 85% building and 15% land value for calculating my depreciation basis. Now my accountant is saying I have to use the tax basis and the county is assessing most properties in my county at 50% or more land value and these are B or C condition properties on small 50 x 150 lots. Using this rule does not give you much to deprecate.  I was talking with a large CPA firm that charges $1000+ to do a simple return and they were saying that they have been using the 85 15 rule and never had a problem. My current accountant is saying that the irs may come after me on it because I am starting to have a lot of properties and the amount is starting to get significant. I was thinking about going back to the seller and seeing about amending the purchase agreement to say 85 15 as that was one of the items that was mentioned on the irs info on the deprecation. I am wondering what other investiors are doing in this area of deprecation.