# Your question: How do I calculate the basis of my rental property?

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## How do I figure the cost basis of a rental property?

The cost basis for rental real estate is your acquisition cost (including any mortgage debt you obtained) minus the value of the land it’s built on. If you paid \$200,000 for a duplex and the land is appraised for \$50,000, your basic cost basis is \$150,000.

## How do I find the basis of my property?

2. Add the cost of major improvements.
3. Subtract the amount of allowable depreciation and casualty and theft losses.

## How do I calculate adjusted basis for rental property?

The adjusted basis is calculated by taking the original cost, adding the cost for improvements and related expenses and subtracting any deductions taken for depreciation and depletion.

## How does the IRS know your cost basis?

With FIFO, the IRS expects you to use the price of your oldest shares—the ones you purchased or otherwise acquired first—to compute your cost basis. … Firms generally provide information about cost basis and use the IRS default (FIFO) unless you select a different method.

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## How do you calculate basis?

With the single-category method, you add up your total investment in the fund (including all those bits and pieces of reinvested dividends), divide it by the number of shares you own, and voila, you know the average basis. That’s the figure you use to calculate gain or loss on sale.

## What increases the basis of property?

The basis of property you buy is usually its cost. … Your original basis in property is adjusted (increased or decreased) by certain events. If you make improvements to the property, increase your basis. If you take deductions for depreciation or casualty losses, reduce your basis.

## What is the basis of a property?

Basis is generally the amount of your capital investment in property for tax purposes. Use your basis to figure depreciation, amortization, depletion, casualty losses, and any gain or loss on the sale, exchange, or other disposition of the property. In most situations, the basis of an asset is its cost to you.

## What if I can’t find my cost basis?

First of all, you should really dig through all your records to try and find the brokerage statements that have your actual cost basis. Try the brokerage firm’s website to see if they have that data or call them to see if it can be provided.