Q: Can I reassess a rental property's value for higher depreciation under U.S. tax code?

A: You are allowed to use the original costs, plus improvements, which should be available from your tax professional. I hope this helps. Zaher Fallahi, Tax Attorney, CPA (Admitted in CA & D.C.).

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A: Under U.S. tax law, you cannot reassess and depreciate a rental property based on its current market value. The IRS requires that depreciation be calculated using your original cost basis, plus the cost of any qualifying capital improvements you've made over time.

Your improvements like the new roof, plumbing, and paint should be added to your property's cost basis. These capital improvements can be depreciated separately from the original structure, using their own depreciation schedules starting from when they were placed in service. This allows you to claim additional depreciation deductions beyond the original building's depreciation.

For future tax planning, consider maintaining detailed records of all capital improvements, including invoices and documentation showing when they were completed. While you can't reset depreciation based on market value, working with a tax professional can help identify opportunities to maximize allowable depreciation deductions within IRS guidelines. They can review your specific situation and help ensure you're claiming all eligible improvements while staying compliant with tax regulations.