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Posted by Tony Cox on April 12, 2006, 7:17 am
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>>> The code specifically states that it does not matter what
>>> the lease term is, a non-residential building is to be
>>> depreciated over 39 years. If the structure is turned over
>>> to the lessee at the end of the lease, then any remaining
>>> basis should be taken as a loss as if the property were
>>> abandoned.
>> Publication 946 says that abandoned property just stops
>> depreciating, even if the cost hasn't been fully recovered.
>> So presumably you're saying we just loose the deduction.
> If you abandon the property, that's like selling it for $0.
>
> Suppose at the end of the lease the book (depreciated) value
> is $10,000. You have an immediate writeoff of $10,000.
Thanks Seth! Pub. 946 doesn't tell you this, of course.
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