YOU vs. IRS: Depreciation – Cost “Allocation” v. Reality

You vs. IRS

S took depreciation deductions for his buildings (rental properties) but not land. The basis (depreciable cost) of each building was based on allocation of value to the buildings v. the land made by his tax preparer. The IRS disputed the allocations and reduced the deductions, claiming too little value was allocated to the land. Held: For the IRS. The IRS made its own allocations between … [Read more...]