IRS's mixed treatment of asbestos abatement costs

In several rulings over the past 2 years, the IRS has generally concluded that the costs directly associated with environmental remediation must be capitalized. In each of these rulines, the IRS concluded that the costs did not qualify as currently deductible repair costs because the costs either in...

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Bibliographic Details
Published in:The Tax Adviser 1994-06, Vol.25 (6), p.360
Main Author: Conjura, Carol
Format: Magazinearticle
Language:English
Subjects:
Asbestos
Asbestos removal
Bioremediation
Capital expenditures
Capitalization
Corporate tax planning
Environmental restoration
Expenditures
Improvements (Law)
Laws, regulations and rules
Letter rulings
Ltr. Rul. 9240004
Ltr. Rul. 9315004
Ltr. Rul. 9411002
Office space
Pollution control costs
State court decisions
Tax court decisions
Tax courts
Tax deductions
Taxation
Taxpayers
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Summary:In several rulings over the past 2 years, the IRS has generally concluded that the costs directly associated with environmental remediation must be capitalized. In each of these rulines, the IRS concluded that the costs did not qualify as currently deductible repair costs because the costs either increased the value of the property or enhanced its use to the taxpayer, thereby resulting in permanent improvements the costs of which must be capitalized. However, in Ltr. Rul. 9411002, the conclusions reached by the IRS are mixed. While the IRS concluded that asbestos removal costs must be capitalized, it permitted the taxpayer to currently deduct asbestos encapsulation costs as incidental repairs.
ISSN:0039-9957