An Abandonment Study can legitimately generate a windfall of depreciation for the owner of an investment or owner-occupied real estate.
An Abandonment Study is appropriate when a commercial property is set to undergo a major demolition or renovation.
When existing tenant improvements are demolished, the undepreciated basis for the tenant improvements can be deducted in the year in which it is realized they no longer have value or when the demolition occurs. The current owner can deduct the undepreciated cost of the tenant improvements even if the prior owner disbursed payments for the tenant improvements.
Make sure you take advantage of these improves IRS Rulings prior to any renovation / demolition project, or you could be leaving serious money on the table.
Improved revenue rulings from January 1, 2012 have allowed building owners to dispose or abandoned components of a building. The new temporary regulations as issued on December 23, 2011 under I.R.C. 263 (a) allows a property owner to dispose of a smaller unit of property provided that the building has been allocated properly to show single units of property within the larger unit.
The type of assets being abandoned during a renovation typically includes: lighting, HVAC equipment, electrical, fixtures, elevators, escalators, building envelop as well as a host of other structural components.
Most commercial real estate investors / owners are leaving money on the table when renovating a structure by not monetizing all of the expired personal property assets. CORE can help make this task a reality while at the same time generate a windfall of additional depreciation.
GIVE THE EXPERTS AT CORE A CALL BEFORE YOU BEGIN YOUR RENOVATION BUILDING PROJECT