Is the all the basis transferred to the cost of the land now?=========>>>>>> In general as you know say you purchase buildings and the land on which they stand for a lump sum,then you usually need to allocate the basis of the property among the land and the buildings so you can figure the depreciation allowable on the buildings.in the case of demolition of building, you need to add demolition costs for the demolition of any building, to the basis of the land on which the demolished building was located. You can not claim the costs as a current deduction. Thus, the tax life of the adjusted basis of the demolished building goes on, now as in nondepreciable land.
What will be my new basis after construction?========>> I guess since you built/constructed it, the original basis of the rental home is the cost of construction.As you had your house built on land that you own, your basis in the home is the cost of the land plus the costs to build the house, including:labor and materials;amounts paid to a contractor; architect’s fees;building permit; utility meter and connection charges |