Capitalize Legal Expenses Added to Basis for Fighting Contested Estate

[HCM]

Unrelated taxpayer was willed land, house, personal property, and mineral rights. A relative contested will. It took 10 years and $60,000 legal expenses before Court granted possession of all property to taxpayer. Can DOD 10 years ago basis be adjusted with prorated legal expenses for investment property portion (land, house, and mineral rights?

[Burke]

Is he intending to sell these items now?

[HCM]

Yes, planning to sell the following separately: plot of land (treated as investment), home that has been vacant for entire period (treated as investment), and personal property.

[New York Enrolled Agent]

Take a look at Reg. 1.212-1(k) and see if your situation is in line with the capitalization of costs to perfect title.