makbo wrote:Why should legal form of ownership have any bearing on depreciation calculations? If one entity owns, say, a ten-unit residential building and land it sits on, there is no question of allocating to land. Yet you are proposing that if the exact same property is owned by ten different entities, somehow the land suddenly disappears for purposes of depreciation?
There is a distinction between legal entity and tax entity as I'm sure you're well aware.
Makbo, if the land was owned by SMLLC A, the building owned by SMLLC B, and SMLLC A & B are both disregarded entities owned by Individual C, I'd be in agreement with you and this thread would not have been created. However, that is not the fact pattern in the OP. The fact pattern was individual has legal title to an interior portion of a building. A separate
regarded entity, the association, has legal title to the land.
It's not as clear cut or as simple as you would like it to be, as evidenced by
Willits. Treatment regarding this fact pattern is heavily dependent on state law surrounding condo and homeowner's associations. Thanks again to supdat for posting the link. I somehow missed that thread when I was researching.
makbo wrote:It just seemed odd to me that you felt it was the normal case that would need authoritative support, rather than the special case you were shooting for.
Sometimes I get crazy ideas. Sometimes I feel like these ideas are worth enough time to vet out because they would be sufficiently beneficial to my current or future clients. We might be different in that respect.