Does land get MACRS depreciation when it is purchased with a building?
A problem gives one purchase price for land and a warehouse. Should I run MACRS on the full purchase price or only the building portion?
Land is not depreciated. If land and a building are purchased together, split the total cost between nondepreciable land and depreciable building basis. Then apply MACRS only to the depreciable building portion.
Example: If a taxpayer pays 900,000 for a warehouse property and the appraisal allocates 225,000 to land, the depreciable building basis starts at 675,000. The land allocation stays outside the MACRS calculation.
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