Investment Property sale question

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Cruncher
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Joined: Mon Feb 01, 2010 12:56 am

Investment Property sale question

Post by Cruncher »

When you sell an investment property, how does the IRS determine land value when you sell? Do they just use what the last Property Tax bill indicates?
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Stinky
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Re: Investment Property sale question

Post by Stinky »

Cruncher wrote: Sun Nov 20, 2022 9:59 pm When you sell an investment property, how does the IRS determine land value when you sell? Do they just use what the last Property Tax bill indicates?
Seems to me that the sale price less expenses of sale would be the “proceeds” for tax reporting purposes on the sale of investment property.
Retired life insurance company financial officer who sincerely believes that ”It’s a GREAT day to be alive!”
tj
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Re: Investment Property sale question

Post by tj »

It's not a black and white question. If you get audited for that, they will come up with their proposed calculation. If you disagree, you potentially have it argued in court. Have to think the tax bill would be a reasonable source of determining land vs structure value, but I would have to think that it depends on the auditor you would get
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Cruncher
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Re: Investment Property sale question

Post by Cruncher »

Thanks guys
FunOnABudget
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Re: Investment Property sale question

Post by FunOnABudget »

If I may ask, isn't the value of the land vs structure when you buy the property much more important than when you sell? Wouldn't the only reason for this to be of interest to the IRS be for depreciation recapture ? What am I missing?
rascott
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Re: Investment Property sale question

Post by rascott »

FunOnABudget wrote: Wed Nov 23, 2022 3:28 pm If I may ask, isn't the value of the land vs structure when you buy the property much more important than when you sell? Wouldn't the only reason for this to be of interest to the IRS be for depreciation recapture ? What am I missing?
I agree.... you do this when you buy the property to determine how much of the total property value you depreciate. No depreciation on the land, but required on the building.

If you are waiting to sell to figure this out, you've been doing something wrong.
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