Ezel / IRS Rulings / 200937035

CCA 200937035: Demolition costs and remaining building basis are added to the land's capital account

Number
200937035
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Chargeable to Capital Account
Topics
Income and deductions
Code sections
§ 280B
Ruling dated
March 18, 2009
Publicly released
September 11, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advised that the remaining basis in a demolished building and the demolition cost were treated as properly chargeable to the capital account of the land under IRC § 280B. Because land is not depreciable, the advice states that those costs could be recovered only as an offset against proceeds from a later sale of the land.

Ruling snapshot

  • Question: How should the remaining building basis and demolition cost be treated after a structure is demolished?
  • Outcome: Advice given.
  • Key authorities: IRC § 280B.

Full text (IRS public release)

ID: CCA-318957-09 Number: 200937035
Release Date: 9/11/2009
Office: ----------------
UILC: 280B.01-02

From: ----------------------
Sent: Wed 3/18/2009 9:57 AM
To: -------------------
Cc:
Subject: RE: 280B

That is correct. I can give you background if you would like, but that is the bottom line - both the remaining basis in the building and the cost of demolition are "treated as properly chargeable to capital account with respect to the land on which the demolished structure was located". As land is not depreciable, these costs are only recoverable as an offset against proceeds from the sale of the land.

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