Building Value %
Portion of purchase price allocated to depreciable building (not land). Land value varies by market.
Property fundamentals
Why Building Value % matters
A supported allocation to depreciable building affects the modeled depreciation deduction. The allocation must be grounded in the property's facts; a default percentage is only an input assumption, and passive-loss and other limits determine the actual tax effect.
How to check Building Value % before you rely on it
Start with the county assessor's split between land and improvements for the parcel, and ask your tax professional whether that allocation is supportable for your return or whether an appraisal or cost segregation is warranted. Do not use the default percentage in a filing. The allocation changes only the modeled depreciation, and whether that deduction reduces your tax this year depends on your own facts.
Related terms
- Depreciation Period
- 27.5 years for residential rentals (IRS standard); 39 years for commercial. Determines annual non-ca…
- Illustrative Tax Effect
- An educational scenario that applies an assumed marginal rate to modeled taxable rental income or lo…
Where Building Value % shows up in TrueCap
Property fundamentals are the facts you enter or confirm about the building itself — price, units, bedrooms, square footage — and the analyzer keeps them separate from assumptions. They decide which benchmarks apply (a 3-bedroom rent benchmark, for example) and appear at the top of every results view and memo so the reader knows exactly what was analyzed.