Rev. Rul. 55-110

Where a taxpayer purchases property, with the intention of removing the old buildings thereon, and then either erecting a new building thereon or using the property without any additional improvements, no deductible loss or expense is sustained or incurred upon the removal of such old buildings. The removal costs constitute a part of the basis of the land acquired. Section 39.23(e)-2 of Regulations 118, and O.D. 1031, C.B. 5, 141 (1921). Further, the basis of such property must be reduced by the amounts of any payments received from the sale of the old buildings