Is there benefit available from demolished assets in a purchased building?
Yes. If you purchase a building and place it into service for at least a short while before renovating, you may be eligible to deduct the cost of the demolished assets in the year of demolition as abandoned property. In this scenario, for every $100,000 of demolished property that is segregated and written off in the year of demolition, a federal income tax NPV benefit of up to about $23,500 is obtained; with up to about another $8,500 for NPV of state income taxes deferred. If renovation takes place before moving operations into the building, the value of the demolished assets must be capitalized to the building.
