You should enter your cost or other basis, or, if less, the fair market value of the home when you first used it for business. You must allocate your cost basis between land and the value of the home. The value of the land should be entered as another asset with an asset type of "land."
After you finish your federal tax return, your information will accurately and automatically transfer into your state return. Just answer a few state specific questions, and you're done.
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