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IRS practice unit: Examining taxpayers electing partial disposition of building

Examining taxpayers electing partial disposition

The IRS Large Business and International (LB&I) division publicly released a “practice unit”—part of a series of IRS examiner “job aides” and training materials intended to describe for IRS agents leading practices about tax concepts in general and specific types of transactions.

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The title of this “process unit” (as this practice unit is referred to by the IRS) is: Examining a taxpayer electing a partial disposition of a building

Read the practice unit on the IRS practice unit webpage (posting date of November 6, 2019).

The practice unit concentrates on the five steps involved in examining a taxpayer that has elected a partial disposition of a building or its structural components, and is intended to assist the IRS examiner in verifying a taxpayer’s compliance with Code section 168 disposition regulations. The five steps for the IRS examiner are to:

  • Determine if partial disposition of a building occurred
  • Identify the disposed portion of the building
  • Identify partially disposed asset and placed-in-service date
  • Determine disposed portion’s adjusted basis
  • Reduce adjusted basis of the asset 

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