Land Value for Depreciation

[Patrick Shep]

if you’re figuring out the land value for depreciation purposes, can I use the Fair market value for the land? The county assessment taxes it at 59k which is WAY too high. A plot of land has sold for $8500, $10k and 29k within that area.  Can these be averaged together or even use the 29k? I don’t want any flags but don’t want to leave anything on the table For depreciation.

[Michael Plaks]

Quote from @Patrick Shep:

if you’re figuring out the land value for depreciation purposes, can I use the Fair market value for the land? 

You will not get audited due to land values you report on your tax return. If you're audited for some other reason, the issue of allocation to land might potentially come up during an audit, but it is still rather unlikely. 

That said, the IRS allows "any reasonable method" of allocation which of course includes FMV. Average or, better yet, calculate FMV per acre.

Keep the comparable data just in case. Ordering an appraisal for such a small property would be silly.