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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.

Watch this video from The Tax Smart Real Estate Investors YouTube channel to learn more.

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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