[WSBARP] Establishing Basis in Property

[David Faber]

Good afternoon,

I am working with a client who purchased three parcels within the last
year. Client took possession of the three parcels in a single deed, and the
REETA reflected a lump sum for all three parcels without apportioning the
price between them. Client is now trying to sell two of the three parcels.
So as to mitigate short-term capital gains, Client wants to apportion the
bulk of the original purchase price to the two parcels being sold. The
Client has valid non-tax reasons for apportioning in this way as well
because the third parcel is not build-ready and will require significant
capital outlay to make it buildable.

My question(s): what is the appropriate method for establishing an
apportionment of a bulk purchase? Is this as easy as having the Client sign
an affidavit attesting to the Client's intention when the purchase was made?

Best,
David J. Faber
Faber Feinson PLLC
210 Polk Street, Suite 1
Port Townsend, WA 98368
(360) 379-4110

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