Tax consequences of tenant leasehold improvement allowances. (Tax Issues): An article from: Journal of Property Management

This digital document is an article from Journal of Property Management, published by Institute of Real Estate Management on March 1, 1993. The length of the article is 1062 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the supplier: Offering tenant leasehold improvement allowances is one strategy used by landlords to attract new tenants or to retain existing ones. This arrangement gives the property owner a right to whatever improvements have been made on a property after the departure of a tenant. The structure of the leasehold improvement allowance will determine the income tax treatment of the arrangement. If leasehold improvements are made in exchange of rent payments, then they will be considered part of the landlord's rental income. On the other hand, if the tenant receives build-out allowances from the landlord, then this amount will be treated as taxable income to the tenant. These tax consequences apply in instances when the improvements are considered real property and not personal property, and when the lease contract is not covered by any rent levelling provisions.

Citation Details
Title: Tax consequences of tenant leasehold improvement allowances. (Tax Issues)
Author: Dennis M. Byrnes
Publication:Journal of Property Management (Refereed)
Date: March 1, 1993
Publisher: Institute of Real Estate Management
Volume: v58 Issue: n2 Page: p12(1)

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