Last year I went to a one day training session on federal taxation issues for loggers. The instructor went over basis in detail. Ron is exactly right in what he has told you about allocating basis, but there is one very important fact that is not well known pertaining to basis. From the workshop:
a) Basis in property purchased at a lump sum price can be allocated to the various attributes of the property
i) Land - can be neither depreciated, ammortized or depleted.
ii) Timber - can be depleted as the timber is sold
iii) Minerals - can be depleted as sold
iv) Improvements - if used for a business purpose or as a rental for profit, may be depreciated
b) No requirement to allocate basis. All basis can, by default, be allocated to land if so desired.
Section b) is very important and something the IRS will never voluntarily tell you. What this means is the tax code contains absolutely no requirements or rules for allocating basis. The tax courts have ruled that in the absence of actual rules, by default there are no rules. They (IRS) will tell you the "accepted accounting practices" and have rules for setting up depletion accounts and sub accounts if you so choose.
So when you are looking for the accepted practices, just remember there are no hard and fast rules. The IRS and most all tax accountants will quote you these accepted practices, but they are not tax law backed.
The book I have is 57 pages, but I have no way to scan it to send to you. I could fax some pages to you if you send me an IM.