Mobile Home Park Depreciation Change after owning for 9 years


  • we owned park for last 9 years
  • no appraisal on file
  • accountant allocated most of the purchase price to the land and so we did not have proper depreciation done
  • looking to change depreciation schedule going forward
  • we read all the advice on the forum from the past

What supporting documents can help us now to change the depreciation schedule to where we allocate just about 30% to the land?
Remember: our original lender does not exist anymore so no appraisal on file
Everybody points us to do a cost segregation study, but with the implications in case of a 1031 sale down the line we do not want to use that tool.

What have others used as proof? How has the IRS taken it?
Thank you for your input.

Does your yearly County appraisal break out the land value versus infrastructure improvements? Are there any Park Owned Homes lumped into this too (hopefully not)? What is your insurance replacement value on the infrastructure? How well or poorly do those values / percentages line up with what you’re proposing?

I assume you want to change depreciation for tax reporting purposes. I would contact the IRS (really have your accountant do this for you) and see what they want as far as documentation and forms (request for change in method of accounting?), which you will have to submit with your tax return when the new depreciation schedule is reported to them.

What are the negative implications for a 1031 exchange? You cannot get the advantageous tax treatment for depreciation on the one hand, and avoid being consistent on the other hand when it comes to a 1031 tax-deferred exchange.