the proper way is to allocate the purchase costs including closing costs based on the ratio of the FMV of the land to the FMV of the entire property. how do you determine FMV of land? there are no official ways. if you are assessed taxes based on the FMV of each perhaps the last tax bill which should be a public record will have the relative values. but you need to check. where I live land is valued at a lower % of FMV than the building but the bill only reports the total assesses value. another source is a realtor in your area. finally, I would guess that many just pull a number out of the air.
