Depreciation

[Terry D EA]

I have a client who came to me this year with rental property. The previous preparer's, either did not depreciate the rental property or depreciated it incorrectly. The preparer who did depreciate the property, apparently has depreciated the entire purchase price which includes the lot. I know if I ask this client what the value of the lot is, he probably won't know. I know it is not broken down on the HUD-1 either. What would be the simpliest way to find out what the value of the lot is to separate and correct the depreciation. Here's all I got, 75K for the rental property with an acquisition date of 12/1/2001. 02, 03, & 04 no depreciation but $2727 SL taken in 05 & 06 which is the correct amount on 75K. Any suggestions please.

Terry D.

[Pacun]

Maybe improvements on the rental made it to the 75K basis (which coincidentally was exactly the amount paid originally). Also find out when it was converted to rental (maybe in 2005, who knows). If what I am saying is correct, all years are correctly filed.

[Margaret CPA in OH]

At least in my local county property tax records, one could make a good faith estimate by looking at the property tax bill. Those bills here allocate an amount to the building and an amount to the land. I suggest if your bills are similar, it might be helpful to look at the relative percentages currently and apply those to the original purchase price. It may not be perfect but I believe it's better than what you now have.

[OldJack]

I would probably let a dead dog lay and not stir up a stink.