You prorate your purchase price based on the % of value allocated to land. 

@Jon DorseyI agree with your CPA and @Aman S. that you can't establish your basis in the investment to be more than what you paid.A portion of the basis will be allocated to Land/building/Improvements/etcThe IRS/Courts have established various methods to come up with the depreciable basis for building.

They can help you choose your chart of accounts and allocate what money is considered capital and what is expense. 

In my example above, your father would be allocated 50% of profits.

The buy/sell agreement didn't allocate the purchase price into the different asset classes, nor was the seller interested in filing an IRS form 8594 to separate out the different assets. 

@Kirk WatkinsPartnership entities have so much flexibility that you can literally allocate income/losses in anyway shape or form.You just need to find the partner to agree to the terms that you want.You would then need to find an attorney to draft up the operating agreement/partnership agreement.

But I don’t really understand them because they talk about mortgages, caps, asset allocation, tax deferring, liquidity.

If so I would heavily take all the dollars you allocated to setting up your entity and structures etc and hire a coach or join a program.

Outside of the tax implications, we're looking to see what others "risk tolerance" would be and where to allocate the funds. 

It's completely dependent on negotiation -- between the operating partners and the capital partners.Typically what you'll find in similar situations is either an LLC or an LP taxed as a partnership with a strong operating agreement in place that spells out income/loss allocation.