Question

LLC bought real estate

Forum|Forum|2 years ago
February 3, 2024
1 reply
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Hello,

I own an LLC and bought a commercial property that sat abandoned for several years (I put the property in the LLC's name). Can I deduct any of the expenses I incurred to bring the property back into a useful state? (Overgrown vegetation removal, trash removal, paint building, re-gravel, utility meter replacement, etc). From reading IRS publications it appears that all these expenses fall under restoration, but most of my expenses were actually areas outside of the building.

TurboTax Home & Biz Windows

PatriciaV

Yes, your commercial property includes the land around it. Because the property was not available to be rented, any costs for repairs or improvements that you incurred increase the basis of the property and should be entered as a separate Rental Asset (improvements). These costs would not be deductible expenses for this property.

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E

et7724Author

Thanks for the reply,

I'm actually using the property for my business, not renting it out (not sure if that makes a difference).

PatriciaV

No, that doesn't change the treatment for the expenses you incurred to remediate the property. The total cost should be a new business asset for depreciation, either Land Improvements or Nonresidential real estate.

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