All Forum Posts by: Dominic S.

Steven Hamilton II - Gotcha. Thanks for the info.

Steve Babiak - It looks that way. The 40% assessed value is then multiplied by the millage rate to arrive at desired tax.

So I'm back to square one. I just got done reading about the various methods to calculate an improvement ratio in Fishman's book. Maybe I'll just use 80% like he said most CPAs do. (TIC)!!

Steven Hamilton II - On my property tax bill I have two figures. A 100% FMV and a 40% assessed value. Can you explain how I would arrive at an improvement ratio with these two figures.

Steven Hamilton II

Thanks for the reply, Steven. So I would start depreciating everything starting on December 15 since this is technically when the house went into service?

What if I didn't put the house into service at all in 2012 but listed it for rent in January 2013? Would I just omit the rental property from my 2012 return like it doesn't exist? Could I then depreciate all my costs mentioned above along with the house on my 2013 tax return?

Hello All,

I bought a property in March 2012 for the purpose of renting it out. I spent the rest of the year fixing it up and I put the house in "in service" (For Rent sign in the yard) on December 15.

I'm trying to use TurboTax Premier instead of a CPA and it's proving to be a huge learning curve. But I'm finding everything interesting and don't want to wave the white flag!

From what I've learned, because the house wasn't in service for all of 2012 (except for the last two weeks), I should take the fix up costs, my fees at closing, utilities, and insurance and capitalize these. Or in other words, add them to the cost basis of the house for depreciation. And then take the 2012 property taxes and add this to my schedule A. Is this correct so far?

Expanding on that:

Can I separate some of the fix up costs like flooring, the new hot water heater, the new fridge, etc and make each of these separate assets for their own depreciation.

Is the initial cost basis for the house the fair market value minus the assessed value from my property tax statement? Or do I take my purchase price into account?

Thanks in advance!