Home cost basis

[Mlihp]

I purchase a home in 1992 for 190k. In 2000 I tore down the home and built a new home on the same property. Is the cost basis (I am selling the home) the cost of the first home plus to cost to build the new home? Or is it only the cost of building the second home?

[Mike9241]

the cost of the land + demolition costs + teh cost of the new structure.

this comes in part from IRC 280B

(1)no deduction otherwise allowable under this chapter shall be allowed to the owner or lessee of such structure for—
(A)any amount expended for such demolition, or
(B)any loss sustained on account of such demolition; and
(2)amounts described in paragraph (1) shall be treated as properly chargeable to capital account with respect to the land on which the demolished structure was located.

and from PUB 523

Examples of improvements you CAN’T include in
your basis. You can’t include:
• Any costs of repairs or maintenance that are neces
sary to keep your home in good condition but don’t
add to its value or prolong its life. Examples include
painting (interior or exterior), fixing leaks, filling holes
or cracks, or replacing broken hardware.
• Any costs of any improvements that are no longer part
of your home (for example, wall-to-wall carpeting that
you installed but later replaced)

[Mlihp]

Thank you, I had not considered the demolition costs. The original home and the land it was on was one price when purchased. Does it need to be separated or just use the original purchase figure?