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We are remodeling a property that will go into service sometime next year and have started playing with the numbers. Normally it would be simple to use the tax assessment to separate the depreciable value of the house from the land value -- except for the creek.

The property has a creek running through it and the original owner built right next to that creek. The house would not be permitted today because of set-back requirements. In fact, if there were a significant fire, it is unlikely we would be allowed to rebuild.

Does this make the land worthless such that all the value is in the house for depreciation purposes?

Thanks for any insights.

Kathleen
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