Partial Disposition Studies

Partial Disposition Studies

Posted by CSR on June 19, 2015

Commercial Property owners have a unique and one time opportunity to receive an immediate tax benefit by writing off portions of property that were abandoned or demolished in previous years such as HVAC systems, walls, roofs, flooring, portions of lighting, plumbing and electrical systems etc.


Based on the new IRS rules for Partial Disposal of commercial property, the opportunity to expense these items is limited for the 2014 tax year.


The Benefits of a Partial Dispositions Study will allow tax payers to claim losses for dispositions that occur in the current tax year and accelerate an immediate tax deduction for undepreciated basis of those disposed of.


A study will eliminate “ghost” assets still being depreciated in the basis of the asset that no longer exists due to tenant improvements or asset replacements. This would include minor asset capitalizations that may be eligible for expensing.


Our Partial Dispositions Study will take an engineering approach to identify and assign a cost to the structural components that are replaced and analyze potential capitalization improvements as possible write-offs. Our work will document deductible expense within the remaining adjusted tax basis of the building with supporting schedules and justifications.


The automatic accounting rules will apply and the Form 3115 will need to be filed by a tax professional to take an immediate tax deduction for catching up disposals that occurred in previous years.

This powerful tax savings tool is a one time opportunity which can create significant cash flow and is limited to the 2014 Tax Year!

Who Should Consider a Partial Disposition Study?


Any and all commercial property owners, including residential, who have minimum of $1 million in their gross book value for building and building improvement accounts.


In excess of $100k for improvements, replacements, renovations in following areas:


  • Roof repairs
  • HVAC systems
  • Electrical
  • Plumbing
  • Parking Lots
  • Painting
  • Flooring
  • Walls, doors, windows

To provide you a free engineered based Estimate and Proposal, we will need the following documents:


  • Full Set of Drawings - remodel drawings and original if available
  • Tax Depreciation Schedules
  • Final Contractor’s Invoice (cost of remodel)
  • Scope of Work if available


Our study will be supported by the recent IRS regulations regarding the deduction and capitalization of costs incurred to acquire, maintain, or improve tangible property. (See TD9636)

Free Estimate and Proposal

Related Resources:

IRS Cost Segregation Audit

Technique Guidelines

Chapter 5: Review and Examination

of a Cost Segregation Study

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