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buildings and land. When depreciable and nondepreciable property
are acquired together for a lump-sum purchase price, the
regulations under section 167 require basis to be apportioned
based on relative value at the time of purchase. Sec. 1.167(a)-
5, Income Tax Regs. Under the regulation, the ratio of (i) the
portion of the purchase price allocated as basis of the
depreciable property to (ii) the total purchase price cannot
exceed the ratio of (a) the value of the depreciable property to
(b) the value of the entire property. Id. Of the total purchase
price of $393,378, petitioner allocated $285,619 as basis in the
depreciable property, i.e., the buildings; thus, under
petitioner’s allocation the value of the buildings equaled
approximately 73 percent ($285,619 � $393,378) of the value of
the whole. Respondent’s argument is that the value of the
buildings was proportionally less. We find that respondent has
failed to carry his burden of proof.
Respondent has not presented any appraisals or other
specific evidence of the value of the buildings and land at the
time petitioner purchased the Property. Rather, respondent
relies on more general evidence to cast doubt on petitioner’s
allocation, such as the fact that in 1988 (the year petitioner
acquired the Property), petitioner was issued a citation because
a portion of the south building was at risk of collapse.
Respondent’s argument, essentially, is that the buildings had
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