The Web is a fabulous invention, but the IRS has figured out how to use it against you. Here’s the story…
For your rental properties, you need proof of your cost-allocation to land and depreciable building. If you don’t have proof of that allocation, the IRS has started using the Web to grab the tax assessor’s allocation and use that number to compute your depreciation deductions.
Find out what this means to you when you read my new, complete article titled Tax Tips: IRS Arrives at the Audit with Tax Assessor’s Allocation to Land and Building.
Three ways our fact-filled article can help you:
- We’ll explain two cost-basis allocation methods. The IRS says that you must “allocate the cost basis according to the respective fair market values of the land and buildings at the time of purchase.” We’ll show you how when you read the full article.
- We’ll tell you why assessed values can get you in trouble. Rental property owners often use assessed values for allocations to land and building. But that can be a mistake. You see, as a general rule, tax assessors tend to undervalue buildings and overvalue land, resulting in low depreciation deductions. Get the whole story when you read the full article.
- You’ll learn what every accountant should insist on. Your accountant should make sure that you come up with evidence for the cost-basis allocation method you choose. You need proof before you’re audited by the IRS. Information that can save you a LOT of headaches is waiting for you when you read the full article.