I am thankful to have a place to "practice" on paper without the money mistakes.Thanks!

It seems to me that anyone holding properties long-term would end up with dozens and dozens of depreciation schedules over the years for all sorts of things that would be considered "improvements".

And what you are saying is good business practice all around.

I wanted to raise this post from the dead to see if anyone has any new information surrounding the legality of this practice?

Then hold the lots until things improve.

I can't think of a third but welcome all suggestions and even improvements to my first two offers.1- Seller finance - 0 down for 15 years.2- Work with the bank to assume the loan and pay the seller $5000. 3- ?????

You could also do a cash out refi to vastly improve that CoC return depending on your mortgage numbers, etc.

In my county, they have an accepted practice of the attorney stating the "upset bid" as being the amount the lender expects to see in order to let somebody else get the property; and the attorney's actual bid will be given as "costs", an amount far below the "upset bid" (this practice is used so that the lender does not have to pay additional amounts sort of like commission to the sheriff based on highest bid received).

Here's a link to the IRS that discusses real estate basis http://www.irs.gov/publications/p551/ar02.html#en_US_2010_publink1000256941Thanks Justin.From their publication, it sounds like you can only add capital improvements to the basis, not things like replacing broken doorknobs, AC handlers, or redoing the floor, etc.I haven't really had to do any capital improvements so far.

I dont think they improve neighborhoods as much as they provide a service for families.