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CCA 201207009: Chief Counsel discussed when an abandonment loss may be deductible

Number
201207009
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Interest
Topics
Income and deductions
Code sections
§ 165
Ruling dated
June 7, 2011
Publicly released
February 17, 2012
Source
View Official PDF

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This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2012, 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 2012
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 advice discussed an abandonment deduction for equipment. The email stated that a prior technical advice memorandum allowed a deduction when the assets were held for salvage value rather than market value. It also referenced an older case allowing an abandonment loss only after the taxpayer had tried to sell the equipment for its salvage value. The email noted that the cited case involved a depreciable asset and offered further assistance, without resolving additional facts.

Ruling snapshot

  • Question: When may a taxpayer claim an abandonment deduction for equipment?
  • Outcome: advice
  • Key authorities: IRC § 165; TAM 7920002; Appeal of Levine Brothers Co. Inc., No. 6832 (Bd Tax App 1926)

Full text (IRS public release)

ID: CCA-671019-11 Number: 201207009
Release Date: 2/17/2012
Office: ----------------
UILC: 163.00-00

From: ----------------
Sent: Tuesday, June 07, 2011 10:19 AM
To: ------------------
Cc: -----------------------------
Subject: RE: RE Call with TP on 165 Abandonment Issue?

Hi -----

Per our conversation, I’ve attached TAM 7920002 which states that an abandonment deduction would be allowed if the assets are held for salvage value, not market value. I’ve also attached an old case that allows an abandonment loss deduction only after the TP has tried to sell the equipment as its salvage value. The equipment in that case, however, is a depreciable asset.

Please let me know if you need further assistance.

Attachments: TAM 7920002
Appeal of Levine Brothers Co. Inc., No. 6832 (Bd Tax App 1926)

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