We have recently been working with him on contract terms that both parties sign of course, stating that for every day that the project is delayed after his projected deadline we deduct a certain amount and for every day he finishes early we give him a bonus.

@Parm Becah, Your basis in that property is the lessor of your acquisition price or what it was worth when you put it into service. 

Single-family homes shouldn't be investment properties, they are meant for people as a primary residence and as such are very expensive on a per-unit basis.

I have a short term rental that has new tenants weekly, but it stays booked every day.

For the past couple of months I have been reading books, listening to podcasts, learning the deal analysis process, surfing marketplaces and doing several other things to better educate myself every day on real estate, especially rental properties. 

I'm hoping to use my license and get some experience/networking in real estate on a more limited basis while I take my day job as far as I can until/if it stops being fulfilling.

I think as I get better at it I will see if (on a case by case basis Nate) its worth paying more in taxes now.

I believe that the original sales price, PLUS any allowed improvements, are what make up the Basis.

Cost or Development basis. 

It seems like this may be good as the annual property tax bill will be less since it was purchased for less than the current market value. 3) Will paying the house in cash or financing the $150k purchase price affect the property tax assessment basis?