USA basis question when selling a house that was torn down and replaced

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My family owns a lake property that's served as a vacation home for 68 years. It has never been rented, thus no depreciation ever taken. My parents gifted it to my siblings and me prior to their deaths, so we assumed their basis. The original waterfront structures (waterfront deck, pier, boathouse, float, etc) were replaced twice over the years, and in 2001, my parents tore down the original cabin and built a new modern house. We're preparing to sell so I'm working up an accounting of our basis.

Are the costs of structures that were replaced included in the basis?

If this were a business asset, it's my understanding that only the depreciated value of a demolished asset gets added to basis. But since this property has never been depreciated for tax purposes, my assumption is that the original cost of the demolished structures remains in our basis.
 
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I did some digging and came up with the relevant section in the IRC: Section 280B, which stipulates that no (current) deduction is allowed for losses and demo costs associated with the demolition of a structure. Instead, these costs get added to the land's basis. In this case, the "loss" = cost + improvements of demolished structures. The distinction between land and building basis is irrelevant here since the property was never rented or otherwise used for business purposes.
 

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