How to Allocate Rental Purchase Prices Between Improvements and Land [Tax Smart Daily 033]

You can depreciate the building and improvements but not the land when you buy a rental property. Because land is not a depreciable asset, you must allocate a portion of the purchase price to its value. This is how you go about determining the allocation.

Listen in to learn:

• Three methods of determining the ratio that you can use to allocate value between improvements and land

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