Katrina abandoned business property but I have a mortgage on it.


Big Easy 5621

I am a Sub S in the renovation business in New Orleans.
Before Katrina I bought a 3 unit. I owe 200K to the bank.
I spent 75K on termites repair, roof & foundation work. I
collected 75K on flood ins. Now, last week i found out its
one wall is starting to lean & I don't want to spend any
more money to fix it up because it will take another 200K
and the area is not getting any 500K buyers.

I sold 2 renovations this year & will have a gain of $140K.
Can I declare the leaning building as abandoned? ( 200K less
land 80K = 120K ). Then my net gain for the year will be
140K minus 120K or only 20K? I intend to tear it down, but
want to see if my ins will cough up any more for the extra
damage i didn't see before. The tear down won't be until mid

Sell it tomorrow to recognize the loss.
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