Cost basis for depreciation vs. adjusted cost basis for sale

Member since 2022 · 1 post · 0 votes

Is the cost basis for depreciation purposes for a rental, after applying the tax assessor's ratios, the same basis that will be used to determine capital gains upon selling the rental?

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Greg ScottPro Member
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
3y
No.
The basis for calculating capital gains tax will be the net sale price, minus the original purchase price, minus the cost of any improvements you made during ownership.
The basis for your depreciation schedules will initially be the purchase price minus the value of the land.
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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
3y
Quote from @Tejhall J.:

Is the cost basis for depreciation purposes for a rental, after applying the tax assessor's ratios, the same basis that will be used to determine capital gains upon selling the rental?

Yes, but the cost basis has to be adjusted by the accumulated depreciation. The cost basis also included the subsequent improvements you have made to the property.
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