My client removed asbestos from a business space. Cost $3200. Do I depreciate this or expense it?
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As bestos as I know
removal of the offending material is a maintenance cost, so expend it.
It's not something that prolongs life of building, but is ordinary and necessary
for the health and welfare of all concernedChEAr$,
Harlan Lunsford, EA n LA -
Pub 535 says the removal of hazardous substances to clean up contamination is a capital expense. However, there is a special rule for environmental clean-up costs that allow for a current deduction if paid prior to 2006.
I don’t know if asbestos removal from a building would fall into the environmental clean-up category. My feeling would be to expense it as normal maintenance expense, however, just a word of caution that environmental clean-up costs generally fall into the capitalization category.Comment
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No way!
>>expense it as normal maintenance<<
No way! You are changing one of the fundamental structural elements in a one-time, major event. You are extending the life of the building because if the asbestos ages it will make the building unsafe to occupy. Putting the asbestos in was a capital expense, and so is replacing it.Comment
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ChEAr$,
Harlan Lunsford, EA n LAComment
Comment