Discussion:Lessor demolition and asbestos removal costs

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Discussion Forum Index --> Tax Questions --> Lessor demolition and asbestos removal costs

Ckcpa (talk|edits) said:

11 January 2007
I've got a client that owns real property and was leasing the property to a leasee pursuant to a land lease. The current tenant's lease expired and the property owner incurred costs for demolishing portions of the exiting structure (built by the tenant) for the new tenant and for asbestos removal.

Does anybody know how to handle these costs? Does the demolition cost need to be added to the basid of the land? Would these demo costs only be able to be deducted as an abandonment expense for improvements made for the new tenant when the new tenant eventually moves out? Does the asbestos removal get depreciated by the lessor as a leasehold improvement?

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