PK & Maverick
1580 Sawgrass Corporate Pkwy.
Ft. Lauderdale, Florida 33323
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An Abandonment Study is a detailed engineering analysis used to determine individual costs of assets that may be retired (abandoned) as part of renovations which normally occur during the ownership period of buildings. When conducted properly, an Abandonment Study provides a defensible position for writing-off the adjusted basis of retired assets. This write-off can be significant and the data contained in the study could also support insurance savings. Additionally, the Abandonment Study can be used to eliminate “ghost” assets (assets on your books that were thrown out long ago) for property tax purposes.
Most businesses write-off the adjusted basis of a fixed asset when that asset is retired. So why do they overlook this strategy with what is often their largest fixed asset - their real estate? The answer is simple; they don’t have the cost details needed to properly support this approach. An Abandonment Study will provide the details and documentation needed to properly write-off abandoned assets that were once buried in the cost of the building.
The IRS provides specific rules pertaining to this application; details and timing are critical. An Abandonment Study includes the detailed documentation needed to claim these valuable write-offs. This analysis can be combined with a cost segregation study, if timed properly, but most cost segregation studies do not contain the details needed to properly support such write-offs.