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Thread: Tax question - condo land value

  1. #1
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    Default Tax question - condo land value

    Trying to get our taxes done a little later than normal this year. I know the requirements for reporting a housing sale have changed, and i was expecting to report the sale of my condo. However the accoutant my wife is going to, requires we report the land value in 2013 for a condo i just sold.

    My understanding is it relates to capital gains, but all my searching gives conflicting info on if you need a land value or not, land doesnt depreciate but the building does (as i understand things.)

    Accountant insists a value is required but cant tell me where to find that info or how best to calculate it.

    Timeline -
    2008 bought condo at peak for 230k as primary residence
    2013 begin renting condo (triggers a change for capotal gains im told)
    2016 condo markets changed. Dont want to carry it anymore. sold condo for ~220k

    Anyone have an idea how to figure out the land value and or the capital loss so i know if the accountants out to lunch?

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    All you need is the price of the condo at 2008, 13, 16. Get a realtor to check on fair value in 2013. "Land value" of a condo is impossible and useless.

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    For most property sales you would need to have a reasonable allocation between land and building (for a house normal land values that I've seen usually range from 20% to 40%.

    The reason is that as the building is a depreciable property selling it for a loss creates what is called a terminal loss and that is fully deductible while land being a non-depreciable property at loss creates a capital loss which is only 50% deductible (any can only be applied against capital gains).

    For condos the land value is almost always zero.

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    Thanks guys. Thats what Jordan advised me yesterday, but good having a second opinion.

    Been audited two years in a row over minor discrepancies ($53 and 1000 in unreported income because i didnt see the approproate tax forms). So being extra causious this year.

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    So did you estimate the 2013 value and then claim the difference between 2013-2016 as a capital gain?

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    Meeting the accountant on Friday but thats my understanding.

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    Originally posted by colsankey
    Meeting the accountant on Friday but thats my understanding.
    If you can post an update after that would be awesome!

    And confirmation of what exactly is required as 'confirmation' of the value at that time, is an email suitable? Needs to be a signed letter from a realtor?

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