I've never had problems with determining whether a level of a house should be a basement because it is below grade. But now I'm working on a tri-level where the lower level is at grade on the three exposed sides (its walkout in the rear) but the topography slopes up as it goes away from that lower level. So it could be considered below grade if you compare that level's elevation to the grade of that part of the house that is away from that level. Here's a photo http://www.appraisalservices.com/trilevel.htm Most of the tri-levels in our area that have below grade basements will have the ground slope up around that particular level so some part of the exposed 3 sides of the basement will obviously be below grade. But this one is only below grade if you compare its elevation to the higher grade this is not adjacent to it. Basement or Level One?