rental property

[dor1500]

Can I determine the fair market value of a rental property by the TAV or the SEV of the house? What do you recommend the best method to determine FMV?

[taxea]

depends on what you need it for

[dor1500]

Rental Property

I need to start a residential rental property for a client in 2009 it was available to rent January of 09 and to depreciate the rental I need to know how to determine the FMV of the property at the time it was available to rent.

[RitaB]

I believe you need

I need to start a residential rental property for a client in 2009 it was available to rent January of 09 and to depreciate the rental I need to know how to determine the FMV of the property at the time it was available to rent.

I believe you need the actual basis, unless the property was inherited January 2009. Don't forget to allocate appropriate costs for non-depreciable land.

[Lion]

Lower of basis or FMV

Have client give you their cost basis as of the date it went into service as a rental. Then, have them research FMV to see if that is lower. Appraiser, realtor, comparable sales of rental properties that month in that neighborhood, public records, newspaper clippings, etc. Have them keep all documentation.

[RitaB]

Right, RitaL

I forgot that property values DO go down. Interestingly, mine and all my clients' home values went UP according to the county tax assessor. I am still mad about that...

[Lion]

Another

Oh, yeah, not the best, but another indicator of FMV, the assessment if near to the time converted to a rental. You need to ask what percentage of FMV the assessment is based on to back into FMV (ours is supposedly 70%). Around here, revaluations are done only every ten years, so not likely to have a timely value to use. And, as Rita says, my home value went UP per the assessor compared to ten years ago, but DOWN over the last few years in FMV based on local sales.