1. Home
  2. Taxes General Forum
  3. Rental Depreciation w/ Deceased Co-Owner

Rental Depreciation w/ Deceased Co-Owner

This question involves a rental property purchased by brother and sister in 1981. Brother (my client) filed MFJ with his wife, claiming his half of depreciation expenses; sister filed her own tax return, claimimg her half of depreciation expenses. Sister died in 1995 when house was re-appraised. Brother inherited her half of rental property and a stepped-up basis. Brother sold house in 2006.

  1. Normally, for the capital gains computation, the basis is reduced by depreciation "allowed or allowable." Now that the house has been sold, does brother reduce the basis by the total amount of depreciation claimed by both he and his sister separately or just the amount of depreciation claimed on his own tax returns from 1981-1995?
  2. Without any other information, I am assuming the depreciable (house) portion of the property is two-thirds of the total, with the undepreciable land being the remaining one-third. Is that a reasonable estimate?
  3. In 1981, was this 15 year real property ACRS depreciation? Thank you.

> > > > > > > > >
Reply to
R. Pile
Loading thread data ...

  1. His basis in 2006 is his original basis on his portion of the property reduced by his allowable depreciation from
1981-2006 plus the 1995 FMV of the portion inherited reduced by his allowable depreciation on that portion from 1995-2006.
  1. I have heard an 80% house 20%land is sometimes used.

  1. Don't know

Reply to
brownie

Basically, there's no generally reasonable estimate.

In some places, the land is worth 105% of the total (people buy houses to knock them down and build new houses, so the land is worth the total plus the cost of knocking down the old house). Seth

Reply to
Seth Breidbart

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.