Discussion:Rental Property-both Residential & Commercial

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Discussion Forum Index --> Advanced Tax Questions --> Rental Property-both Residential & Commercial
Discussion Forum Index --> Tax Questions --> Rental Property-both Residential & Commercial

Keithwin1 (talk|edits) said:

31 January 2008
husband/wife parternship LLC (IL) purchase an existing building for $500k as rental property. approximate 5000 sq ft is commercial space rented on 1st floor, with 2500 sq ft of apartment space rented on 2nd floor. should i break out the res & comm space for depreciation based on sq footage (27.5yrs res & 39yrs comm)?? and, while on topic, how do i assign a value to the land piece to pull out of the $500k purchase price?? thanks you!!

Ao in lv (talk|edits) said:

31 January 2008
Answer to first question is yes (sq ft is the easiest way to do it).

Second question, re land, the quick & dirty way is to pull the paperwork at the assessor's office and see what value the assessor has placed on the land. Better would be if an appraisal was done as part of the sale, and the appraisal happened to address land values.

Taxstudent (talk|edits) said:

31 January 2008
Residential rental property is identified at the building level according to the statute. Though some authority exists that allows you to treat building subsections as "building", I can't recall anything that lets you treat it as "a building", especially for residential rental identification.

Death&Taxes (talk|edits) said:

31 January 2008
Discussion: Commercial or Residential rental? Glmpllc points out Sec. 168(e)(2) seems to make this property commercial.

RoyDaleOne (talk|edits) said:

31 January 2008
I believe you should allocate the purchase price to the various assets purchased.

I actually believe this is required. You allocate to the land, parking lot, fences, etc.

Say a store was on the first floor and the owner lived about the store?

Taxstudent (talk|edits) said:

31 January 2008
That other thread brings back memories. Glmpllc's response is almost word-for-word what I was going to say until I hit preview and saw his post. It was uncanny.

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