Rochester, MN · Member since 2012 · 2 posts · 1 vote
I am submitting my US tax return for 2011 & I have a house in the UK which I am renting out. As part of my return I need to enter the % of the building is worth versus the land for deprecation purposes.
The person helping with my return suggestes 80% building versus 20% land which I assume is some standard % in the US?
Anyway I'm not sure how to dertermine this for a house in the UK, but looking at my mortgage valuation I believe its more like 42% building verses 58% land.
So I would assume I should really go with the mortgage valuation as its probably more realistic, but what are the tax implications here?
I don't know the correct terminology here, but I assume I will be able to claim less loss back against the amount of tax on my earnings, but when I come to sell the house, the cost basis of the house will be higher meaning I will pay less tax on any capital gains.
Would apprechiate any advice - especially from those who have submitted a return that inclued a UK rental property.
Thanks :-)
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
You might contact John Carey in London I think he's an old member here.
I'd tend to agree with your assessment, they stopped making land in the UK a long time ago and many buildings are sitting on property worth much more than the improvements....as usual it depends on location.
I couldn'tcatch the link above, but I'd think some phone calls in the local area, brokers and assessors/appraisers will get you close enough for government work......lol