I have a client (LLC) which has converted a block of rental properties (both residential and commercial) into a ground lease, part way through the 2012 year. At the date the ground lease was executed, the client began receiving a base rent from the lessee, and all rents from existing tennants were transferred to the lessee. The tennants will remain in place potentially through the end of 2013. My question is: what is the status of the depreciated real property? Do I have an "abandonment" loss (ordinary loss) equal to the deprecited basis of the buildings and improvements and, if so, is it at the time the ground lease was executed or not until the buildings are razed by the lessee at some future date? Or do I have "idle property" upon which the client can continue to take depreciation until the buildings are razed, and the lessee is absolutely going forward with construction? Or is it something else altogether? Any input is greatly appreciated.