Client purchased a lot. Spent money for plans, built slab ..and then due to an environmental issue couldn't build on the lot. What happens to those costs incurred (obviously the cost of the land is carried on the books) but can they deduct the costs they incurred for the plans, zoning inspections etc or must they be capitalized as part of the land costs now?
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Well, they must be capitalized in any case. If he ever builds the building, add those early costs to that. If he never builds the building, include those costs as additional basis when he eventually sells or exchanges the land.Roland Slugg
"I do what I can." -
This sounds like an addition to the basis in the land.Comment
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