Unfortunately there is no absolute correct answer, as how this is handled is all over the board.
The IRS likes "gray" and this is certainly one of those areas.
Take a look at the assessor's report for your specific condominium and see if any of the assessed value is allocated to land.
However, keep in mind, that this is only one fact in determining whether there is land value.
If the assessor report shows zero land value, there are some that will allocate all to the building. The IRS may challenge that, but it would be up to them to provide some clear evidence that zero is incorrect.
But I would say in general, that the Condo Association owns the land in a separate entity. Condo owner's typically have air-rights.
In Letter Ruling 9110001 the IRS ruled that a taxpayer may NOT allocate its cost basis of land and building solely according to the assessed values of the land and buildings for real estate tax purposes if better evidence exists to determine the proper allocation. The key here is IF there is better evidence. Once again, the IRS likes gray areas.
So check your assessor records and possibly check with a tax professional in your area as to how they see the allocation; which may depend on a taxpayer's risk tolerance.
*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.
