Personal Residence 1 acre - subdivided

[Gary2]

I don't think anyone is suggesting that tax assessments be used for total basis, just that they be used to calculate the land vs. building ratios.

Just a caution. Advise your client to sell the land BEFORE it is sub-divided. Let the purchaser do that. Because once land is subdivided, unless it falls under all the regs of Sect. 1237, it will be treated as ordinary income realized, not capital gains.

A quick looks at 1.1237-1 suggests that it's relatively easy to qualify for investment treatment, i.e. capital gains. You're right that this should be looked at carefully to be sure, but my reading of the base note is that they have to subdivide first, because they're only selling part of the land.