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prperty tax allocable to schedule E versus A

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    prperty tax allocable to schedule E versus A

    I have a retired customer that has owned and resided in a house in a rural area. The house sits on 50 acres of land and she rents 39 of the acres to a neighboring farmer for FMV rent. She no longer itemizes her deductions. Will be preparing a schedule "E" for the rental income and using part of her total property taxes as a deduction on "E".

    $ 2,338 total property tax paid in 2017 ( $ 33,700 assessed value of land ) ( $ 102,900 assessed value of improvements ) ( $ 136,600 total assessed value )

    25 % = portion of property tax paid allocable to land ( $ 2,338 x 25% = $ 585 )

    $ 455 = portion of property tax paid to schedule "E" ? ( $ 585 x 78% of total land ) ( 39 / 50 = 78% )

    Was wondering if this is a reasonable way to calculate the property tax amount to deduct on schedule "E"

    Thanks for your comments on this.

    That is how I would usually do it.

    The possible exceptions is if the property taxes on land are assessed at a different rate than the building, or if there is evidence that one part of the land is 'better' (more valuable) than another part of the land. Otherwise, your method is probably the 'default' method.


      Here we have land use tax and a separate value assigned. I get my % that way and usually do not have a problem.


        I have used the method you described for years.