Business rental property in service for 5 years was demolished in 2018. To dispose, can the sale price be $0? Goal is to use the passive loss on taxes.

[jonhan0531]

Is there another way to dispose of a business rental property that was demolished besides indicating it was a "Sale"? 

[rbynaker · Accepted solution]

I'm not sure "demolished" counts as "disposed of in a fully taxable transaction".  Isn't there still land?  What's happening with the land?

[itonewbie]

I believe the default tax treatment for demolition would be to capitalize the adjusted basis of the demolished structure to land, which is not ideal and probably not the answer your client is looking for.