Other People's Money
Back to library
Real Estate

Partial Asset Disposition Election

Replace roof/HVAC? Write off old component's remaining basis.

Overview

When replacing a building component (roof, HVAC, windows, flooring), the Partial Asset Disposition (PAD) election lets you write off the remaining undepreciated basis of the old component immediately — rather than continuing to depreciate a component that no longer exists. Requires cost seg to identify component basis. Common $10–50k current-year deduction per replacement.

Best fit
Rental property owners doing capexCommercial building ownersCost-seg users
Estimated impact
$10–50k current-year deduction per major replacement

Click Generate advisory deep dive for mechanics, IRC citations, a step-by-step execution plan, a worked numeric example on your profile, costs, risks, and this-week actions.

More real estate strategies

See all Real Estate strategies
OPM