Deconstructed Structure Appraisals
In the real estate and construction world, deconstruction is the disassembly, rather than demolition, of an existing structure. A deconstruction appraisal is the appraisal of building materials from a deconstructed structure, which is typically used when the owner of the structure chooses to donate the building materials to a qualified non-profit for tax break purposes and the total value of the materials exceeds $5,000.
Owners can donate reusable material from these jobs to a qualified non-profit organization and receive considerable tax breaks, depending on how much the donated material is worth. Almost all materials qualify for donation, including siding, roofing, windows, cabinets, working appliances, light fixtures, and more.
Although the cost of deconstruction can be more expensive than demolition because it’s so much more labor intensive, the tax advantages can be significant for the owner of the property. In addition to the tax incentives, deconstruction is better for the environment and provides materials that can be reused in other construction projects at reduced costs. Deconstruction is a much greener option than simply dumping materials in a landfill. Diverting an entire dwelling’s worth of building materials from the landfill is certainly a good way to make a positive impact, as construction and demolition (C&D) waste accounts for 12% to 50% of the entire waste stream of material. Deconstruction can also save a property owner a significant amount by avoiding dumping costs.
If the value of the materials is more than $5,000, the IRS requires that an appraisal be conducted by a certified deconstruction appraiser. Owners need to make sure that the appraiser is certified and understands the process of deconstruction and deconstruction appraisals. Items must be listed in Section B of IRS form 8283. The owner needs to submit a donation receipt, the completed form 8283, and a copy of the qualified deconstruction appraisal to the IRS to receive the tax benefits. Additional information is available at www.irs.gov.
Types of Deconstruction Appraisals
The typical appraisal for a deconstruction project is a summary format report adhering to Standard Rule Eight of the Uniform Standards of Professional Appraisal Practice (USPAP) standards and guidelines, similar to our machinery and equipment appraisals.
EquipNet deconstruction appraisers have extensive experience in deconstruction, having performed numerous deconstruction projects for residential and commercial property owners throughout the United States. EquipNet is an “E-stewards Enterprise company,” committed to responsible environmental and recycling practices.