Question/scenario for the board:
1. Property with 3 buildings is purchased for $1MM.
2. Property is subdivided into three parts (1 building each) and one of those sub-parcels is sold for $1MM. (The sale occurs more than 1 year after the initial purchase and the seller is not [should not] be considered a 'dealer' for IRS purposes.)
How is the tax consequence determined? Does the IRS assign a basis to each parcel at the time it is subdivided?
1. Property with 3 buildings is purchased for $1MM.
2. Property is subdivided into three parts (1 building each) and one of those sub-parcels is sold for $1MM. (The sale occurs more than 1 year after the initial purchase and the seller is not [should not] be considered a 'dealer' for IRS purposes.)
How is the tax consequence determined? Does the IRS assign a basis to each parcel at the time it is subdivided?