Abandonment Analysis

A company or individual that is impacted by:

• Economic downturn
• Sudden life changes
• Legal issues
• Environmental factors
• Fear of properties history
• High maintenance costs
• Job relocation or migration
• Social factors
• Inherited property
• Complexity of ownership

• Maximized tax deductions
• Improved cash flow
• Reduced risk of IRS penalties
• Improved decision-making and strategic planning
• Enhancing operational efficiency
• Optimizing capital allocation

An Abandonment Analysis can result in significant tax savings for businesses by allowing the deduction of losses on abandoned assets. This process is particularly beneficial when assets are physically removed, demolished, or rendered obsolete during renovations or operational changes. If you abandon business or investment property, the loss is generally deductible as an ordinary loss, even if the property is a capital asset. This means you can offset ordinary income, such as profits from operations, potentially reducing your overall tax liability. When abandoning a portion of a property, such as removing old HVAC units during a building renovation, you can elect a partial disposition. This allows you to write off the remaining depreciable basis of the abandoned portion, leading to immediate tax deductions.