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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2196
Experience:  IRS licensed Enrolled Agent and tax instructor
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My question regards ***** ***** Line 36. (My wife does home

Customer Question

My question regards ***** ***** Line 36. (My wife does home childcare). I'm not clear on what value to put in here. The original purchase price of the house? The last appraisal? Or do I look at my last local property value statement? Also, does the figure on Line 36 on my 2015 return need to be the same as the previous year's return? If it's different will this cause a problem? Thanks from a last minute filer.
Submitted: 6 months ago.
Category: Tax
Expert:  emc011075 replied 6 months ago.
Hi. My name is ***** ***** I will be happy to help you. You will have to figure out your adjusted basis and current fair market value of the house. Than you use the smaller one. Your adjusted basis will be your purchase plus cost of major improvements you've done to he house since you bought it. For the current fair market value you can use website such as or your county/city tax assessment (look at your property tax bill) and add about 20%.
Customer: replied 6 months ago.
Thank you for the information. I did this for the first time last year. I didn't properly understand this section and consequently used a very low figure on line 36 (I subtracted the land value first). Now that I realize this I want to use the correct figure this year, which will be substantially higher. But of course I don't want to draw any special attention to my return either. Do they expect the numbers here to be about the same each year?
Expert:  emc011075 replied 6 months ago.
The calculation is for the depreciation purposes. On line 36 you enter total value of the property and on line 37 you enter value of the land. On line 37 you will calculate value of the building. The land is never depreciated, you can only depreciate the building. Once claimed, the value for depreciation should be same but if you used really a low one you can change it. But keep in mind, the more depreciation you take the more you will have to repay when you sell the sale the house. If you choose the simplified method ($5 per square foot, up to 300 sq. feet or $1500). It is much easier to use and you don't have to worry about depreciation or later repayment. It depends which one give you a better deduction.
Expert:  emc011075 replied 6 months ago.
Any questions? Is there anything else I can help you with today? And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.