Calculating cost basis for multi-unit real estate purchase

[devnull]

I purchased multiple units of differing types in one transaction. Given they are different types, doing a straight (Purchase Price / Square Footage) calculation doesn't accurately reflect comparable sales for each unit type. As an example:

Unit 1, 350 sf, comparable sales at the time of purchase $45k

Unit 2, 650 sf, comparable sales at the time of purchase $55k

Purchased together for $100k

In what ways can I assign the cost basis for tax purposes?

[JulieS]

Although basis is usually apportioned by square footage, you can use the comparable values if you think it is more accurate. 

Unit 1 would be $45,000 and unit 2 would be $55,000. Just make sure you apportion the closing costs the same way, so unit 1  is 45% and unit 2 is 55%.

The IRS allows you to use any reasonable method to allocate basis, but you need to make sure your are consistent.