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Visitor II

Why isn't the land value removed properly to reflect an accurate cost basis for rental property?

I bought a home for $670K and the land value is $430K.  Why does Turbo Tax tell me that my rental property will depreciate only $3,500 for the next 27 1/2 years? Shouldn't it be $240,000. (I entered the land value on the "Enter Property Tax Values" Screen under Wages & Income tab for Property Profile)

Did I do this correctly?

Any help would be appreciated.

2 Comments
TurboTax Specialist

Why isn't the land value removed properly to reflect an accurate cost basis for rental property?

When did you place the property in service? The figure generated is likely not for a full year's depreciation. 

Catalyst V

Why isn't the land value removed properly to reflect an accurate cost basis for rental property?

Sounds to me like $3,500 is your first year depreciation figured on a mid-month convention. I figure you placed it in service in July 2017 for a first year depreciation of $3,500. That amount is close enough for me to call correct, to properly depreciate $240K over the next 27.5 years.