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           The Cost Segregation Specialist

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Disposition of Assets occurs when an asset is taken out of service and no salvage value is received for that asset.  Additionally, removing the asset's cost and accumulated depreciation from the books, the asset's net book value, if it has any, is written off as a loss.  This type of tax strategy, also known as a Retirement of Assets or Abandonment Study, must be done in conjunction with a Cost Segregation Study and must be implemented prior to any demolition or renovation of the building.  Another caveat to this strategy is that the personal property within the structure was not purchased with the intent to be demolished;  this is due to the fact that if the intent was to destroy the property, then there was no intrinsic value that could be assigned to the property.


The IRS requires that property owners depreciate the following Units of Property within their Real Property:





  • Electrical System
  • Plumbing System
  • HVAC System
  • Building Structure
  • Fire Suppression and Alarm System
  • Security System
  • Gas Distribution System
  • Elevators


While the most common retirement asset with our clients tends to be the lighting systems; the same principle of removal of an original system to be replaced by a newer one holds true with the other Units of Property changes.  TCSS will provide you with the required documentation to ensure that you can claim this deduction to improve your cash flow.



Please fill out the following form to receive  complimentary, no obligation information on Disposition of Assets that could provide your company with potential tax savings.

DISPOSITION OF ASSETS

DEPRECIABLE UNITS OF PROPERTY WITHIN REAL PROPERTY 

​FREE DISPOSITION OF ASSETS INFORMATION