Calculating Adjusted Cost Basis?
I've searched the forums and haven't found any discussions that address a couple questions I have about calculating cost basis of a rental property.
1) I know that to determine cost basis, you need to multiply the purchase price of the house by the land/improvement ratio, which you can calculate based on your property tax assessment or the appraisal from when the house was purchased. Would I use the property tax card from the year I bought my house (2015), the year I put it into service (2017), or the latest one (2018)? Similarly, would using the 2015 appraisal be valid?
2) To calculate adjusted cost basis, it's necessary to add closing costs and costs of improvements and subtract agent rebates/seller credits. But is this done on the original purchase price (before subtracting the land value) or on the cost basis (after multiplying the purchase price by the improvement ratio)?