Depreciation of Rental Property

[Yardley CPA]

Client purchased Condo in January 2013 for 180,000 and started to rent the property on January 15th. I asked client to provide me with the value of the land as reflected on the tax bill. She contacted the township tax collector and was told that the land is valued at $75,000 and the building at $97,000. Does that allocation sound correct (about 44% is attributed to land value)? What amount should I depreciate over 27.5 years? 105,000 (180,000 - 75,000)?

Thanks!

[Elrod]

Depending where it is at, it could be right.

I would do 105

[Pacun]

I thought condos were built on the air and there was no land involved. The last time I represented someone, the auditor didn't have an issue when the whole price was depreciated. I guess my client belonged to the co-op and that's what made the difference. Unless the condos are built on a golf course, the land for each condo is very little if a building. A lot of it if a house is converted to condos.

[Yardley CPA]

Pacun...my thinking was similar to yours. It's my understanding that this condo is not overly large and is part of a building housing several condo units. The amount attributed to land seemed high to me, but that is what the township tax collector told her.