Hi everyone,

I have a question regarding demolition costs for tenant improvements. Now this specifically is a new tenant improvement to replace an old one. It was a floor on a suite that was demolished. I had initially thought that you would capitalize the costs to the new tenant improvement. But then I read this revenue ruling: https://www.irs.gov/pub/irs-drop/rr-00-07.pdf .

It says that costs to remove telephones were deductible because it was related to the old asset. It also cited 280B but contrasted it by saying a whole building was to be added to the basis of the land. So my thinking is that I can go ahead and deduct those costs. I wanted to do a quick sanity check though to confirm if people agree.

Thanks in advance.