top of page

Notre Dame

Updated: Apr 24, 2020

The cathedral’s construction began in the year 1163 and completed in 1345. The building has 2 towers which are in excess of 226 feet in height. It was consecrated to the Virgin Mary and is most probably the finest example of French Gothic Architecture.

“Our Lady” was injured by fire on April 15, 2019. People speculated the blaze was linked to maintenance work.

If this situation was considered a residential piece, the owner must characterize the renovation to ensure rapid deductibility to take advantage of the depreciation expense.

Depreciation, the wear and tear of a building, is tax deductible as an expense based on characterization of the expense. The IRS have illustrated guidelines in the code.

Commercial property (ie a shopping center) allows the owner to deduct the depreciation expense over a period of years, usually 39.5. Basically the expense is calculated by dividing the cost of construction over 39.5 years .

Foreign Real Property is depreciated over 40 years, while domestic commercial property is depreciated for 39.5 years. Residential property is depreciated over 27.5 years. Cost allocation of construction allows the owner to earmark various components into categories that benefit with a more rapid depreciation, thus reducing net income through acceleration of depreciation. Real Property includes the building, the internal components of the building and land improvements (or landscaping). For example, windows, doors, shelves, plumbing fixtures are depreciated over a lifetime of 5-7 years and enjoy a more rapid depreciation expense.

Preparing the land for landscaping or grounds, drainage, stabilization, (direct association with the building) fences enjoy a life of 15 years which allows the owner an enhanced write off reducing taxes.

The lower amount of year’s life, the greater the deduction. Appliances, carpet, furniture, shelves, and most personal property (that when abandoned or sold can be removed) will be depreciated over 5 or 7 years.

Cost segregation allows the owner to identify personal property included in the construction and take a faster deduction with a shorter year. These items are called section 1245 property.

Examples of 1245 reclassified property are cabinets, counters, accent lighting, decorative mill work, drapery, blinds, emergency generator, security systems, music systems, and air conditioner systems.

Notre Dame will be repaired. Some people with whom I spoke at the sight said that the renovation may exceed 10 years and $100,000,000.00 USD as an expense.

Cost Segregation is a huge advantage to the taxpayer who has ownership for an existing multi-family of large commercial property. Owners who elect cost segregation under IRS guidelines may enjoy exercised depreciation accumulated depreciation over the years by recapturing these past years’ depreciation into the current year’s return.

Notre Dame is one of the many monuments that dot the landscape of the most beautiful city on earth. It must be preserved.

16 views0 comments

Recent Posts

See All

CARES Act Website

The U.S. Treasury Department has created a website with many important forms for the PPP Loan Program Most important is the application for the PPP loan forgiveness but there are many forms which will

What PPP pays

That is our understanding at the moment. We keep hearing though that SBA and IRS will provide further guidance before the 8 weeks is up. There are 3 tests to qualify for discharge: Spend the money on

bottom of page