Allocation of Basis

When commercial property is acquired, it consists of land and improvements to the land (generally a building). The new owner needs to know how to allocate the price paid between the two, because improvements are allowed to be written off (depreciated, cost recovery) over their useful life. Land is not.
There are many ways to do this. Appraisals can be used, tax assessments, or any other reasonable method. One of the easiest defensible methods is to use the tax assessment. If you look at the tax property record you will see where the county assessor or appraiser has allocated the taxable value of the property between the land and the improvements. If you use these for allocating your basis, you won't get much argument from the IRS.

Assessor records sample:

Land                                $75,000 = 25%
Improvements                $225,000 = 75%
Total Assessment          $300,000 100%

Your sample property            Purchase Price

Land                                        $600,000   X   25%  =   $150,000
Improvements                           $600,000   X   75% =    $450,000
                                                                         100%     $600,000

Use this simple and reliable method until you find a more advantageous defensible method that your accountant is satisfied with.