At the outset of ownership, taxpayers are routinely not well-versed enough to allocate a valid portion to the cost of land. Preparers are not either, often having no knowledge of real estate values in question. Some of us use 10%, some us 20%, some vary with two-story structures, etc. Notices from local property tax assessors are not much help, and real estate contracts for sale do not usually disclose the value of the land separately.
All to say that both the selling price and original cost of land are usually subject to flimsy documentation. To comply with Sec 267, should we use the same allocation % for the selling price as we do for original allocation? (In absence of other information)
