Deconstruction Appraisals Can Provide Significant Tax Breaks for Building Owners
In the real estate and construction world, deconstruction is the disassembly, rather than demolition, of an existing structure. Owners can then donate reusable material from these jobs to a qualified non-profit organization and receive considerable tax breaks, depending on how much the donated material is worth.
Almost all materials qualify for donation, including siding, roofing, windows, cabinets, working appliances, light fixtures, and more. Although the cost of deconstruction can be more expensive than demolition because it’s so much more labor intensive, the tax advantages can be significant for the owner of the property. In addition to the tax incentives, deconstruction is better for the environment and provides materials that can be reused in other construction projects at reduced costs. Deconstruction is a much greener option than simply dumping materials in a landfill (you can also save on significant dumping costs).
If the value of the materials is more than $5,000, the IRS requires that an appraisal be conducted by a certified appraiser. Owners need to make sure that the appraiser is certified and understands the process of deconstruction and deconstruction appraisal. Items must be listed in Section B of IRS form 8283. The owner needs to submit a donation receipt, the completed form 8283, and a copy of the qualified appraisal to the IRS to receive the tax benefits.
In this blog, A House by the Park, there is a great video and example of what happens during the deconstruction process.
Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!
By: Present Value
Additional Reading
Certified Machinery and Equipment Appraisers: Present Value
Appraisers Seeking Resources to Determine the Value of Green Buildings