As a follow-up to your response to my questions:
- Basis in any asset is predicated on economics. Based on your facts, you incurred an original cost which clearly meets the economics test; you had out of pocket expense associated with the purchase. This is the beginning of your basis.
- Had you actually paid someone to perform some of the tasks you noted, then these costs would have been deductible. However, the tax law does not allow an increase in basis or deduction for either your time or a volunteers time. There is no economic outlaw.
- As noted by @Anonymous_ , what you are wanting to do, runs contrary to the tax law. Anyone investing in the stock market would love to be able to increase their stock basis should FMV exceed their cost minimizing or eliminating any gain. Once again, there is no economic outlay of cash in either case, and as a result, no impact to basis.
- You have already benefited from a tax perspective in deducting the costs noted; vines, fertilizer, etc.
- Based on your facts, there is no support in the tax law to increase your basis in the vines based on an increase in FMV.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
