Define taxable value of land

[Sherill]

I am doing a home office...the house has taxable value $34,000. The house sits on 137 acres worth $91000.
What is the taxable value of the home?
What is the taxable value of the land?

[OldJack]

For office in the home depreciation the basis is the lower of adjusted cost basis or fair market value of the building only.

[Brian EA]

I am doing a home office...the house has taxable value $34,000. The house sits on 137 acres worth $91000.
What is the taxable value of the home?
What is the taxable value of the land?

Land does not depreciate

[Matt Sova]

House

I am doing a home office...the house has taxable value $34,000. The house sits on 137 acres worth $91000.
What is the taxable value of the home?
What is the taxable value of the land?

I take it the Taxable Value is what is listed on the property tax statement. In that case I would take the cost (or FMV if lower) multiplied by 34/125ths to get the depreciable value of the structure.

[OldJack]

Matt it looks like you would depreciate some land value? 34/125ths would allocate all FMV amounts including the land value. I don't think that would be depreciable.

[Unregistered]

Land Value

34,000.00 X .2 = Land Value = 6800.00
34,000.00 - 6800.00 = House Value X Business Use % = Depreciable House Value

Profit

[Matt Sova]

Huh???

Matt it looks like you would depreciate some land value? 34/125ths would allocate all FMV amounts including the land value. I don't think that would be depreciable.

In the original post the amounts were a house with a taxable value of 34k and land with a value of 91k. 34 (house) + 91 (land) = 125k. 34 (house) / 125 (total) = the percentage of original cost that is allocated to the house only.

Is there something I am missing???

[OldJack]

Is there something I am missing???

Yep! Your cost includes land value under the house. Look at the post just before yours for a logical building depreciation value.

[Matt Sova]

137 acres

The house sits on 137 acres. The land value would be nominal at best.

An acre is 43,560 sf. So the land "under the house" is calculated as such:
SF of house / (43560 * 137) which is actuall .000167568 per 1000sf of house.

So in a house and land that cost say 100,000 and the house is 1000sf and you use my formula of 34/125 based on value of land and house the house would be 100,000 * 34/125 = 27,200.

Now if you want to calculate land value it would be 27,200 * .000167568 = 4.56. Hmm less than $5 worth of ground under that house in this case.

Obviously we have to allocate something to land, and in the case where we have nothing to go by a percentage of some sort applied to land is correct. But in this case, my formula is the correct one.

Matt

[Unregistered]

House Basis

After some thought it sounds like you already have the basis of the land that the house sits on (91,000.00) so use the full amount 34,000.00 as basis for the house do not forget to add capital improvements and make any other adjustments to basis required.

Profit

[OldJack]

The house sits on 137 acres. The land value would be nominal at best.

Matt... you really need to ponder that statement. 137 acres would have a nominal cost?
You must not have seen the price of land lately.

[Chief]

Value of Land

Here in Pinellas County Florida, we have tax assessor records that list the value of a building and the value of the land. Usually the property sells for more than the TA's evaluation. I determine the per centage on the TA's evaluation and apply the same per centage to the total selling price. This has worked because it is based on the Assessor's decision and on the selling price of the property.

[Matt Sova]

Read the initial post

Matt... you really need to ponder that statement. 137 acres would have a nominal cost?
You must not have seen the price of land lately.

Jack...go back to the original post. The land has a value of 91k the house 34 k. So the house basis is 34/125 * the original cost. See the land is 91/125 * original cost.

[OldJack]

Jack...go back to the original post. The land has a value of 91k the house 34 k. So the house basis is 34/125 * the original cost. See the land is 91/125 * original cost.

The original post was to determine the basis of the house for "depreciation" of an office-in-the-home. The house was said to be worth $34k and land valued was stated also. Unless the cost of said house is less than the stated value then that would be the depreciation basis. Had the original post not identified the value of the land itself we would probably have nothing to talk about. You can't just allocate 34/125 of total purchase price including land cost and say that is the "depreciable" basis of the house.