Question

How to caculate Fair market value for rental property for first time?

Forum|Forum|2 years ago
March 6, 2024
1 reply
0 views

Hello,

I purchased the house in 2014 for $500,000 ( Land value was 95,000 and remaining was Improvements).

I rented the house in 2023 (last year 1st time) if I sell that house at that time it would be around $850,000 (estimates from Zillow and Redfin)

How do i calculate Fair market value ? Which provides breakdown for Land and Improvements?

TT is very confusing in navigating this.

Regards

R

TurboTax Premier Online

M

Mike9241

Since FMV of the property is greater than your cost basis back in 2014 + subsequent improvements, for tax purposes you use the cost for depreciation of the building and improvements, not FMV. Only if FMV was less than cost would that be used.

F

Fresher_TTUAuthor

Thanks for your answer. One follow-up question. I am in the tax bracket 22% will i get 22% of depreciation in my rental income or what % of the amount will be reduced in my rental income?

Regards

R