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Determining Property Cost versus Land Basis
Would appreciate clarification on best determining my dwelling versus land value for depreciation:
- Purchased first duplex - Early April 2018 - $369,000 - California
- New Tax Assessment received assumes $143,541 (Land) and $225,459 (Fixtures)
- However, while my appraisal gave the sales comp approach the most weight in determining value, the Cost Approach was second and had the following breakdown:
"...Site value was determined by a review of assessors tax records for land value and was determined to be the most effective as there were no recent lot sales. Similar lots had values ranging from $52k to $93k. Opinion of site value: $61k - Dwelling $312k + Garage $42k (Total Est. Cost New = $354k)."
**I understand that land values in California are higher, but should I really attribute roughly 39% of my cost to land? I also spent approx. $4k for new fencing, which I know should be included in my overall basis as a capital improvement, but I have read that it has a shorter depreciation schedule, so how do I show this on my taxes for 2018?
Thank you~