Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 05 - Division of Revenues
Regulation 1997-4 - Comprehensive Individual Income Tax Regulations
Rule 26-51-424 - DEDUCTIONS - LOSSES
Rule 3.26-51-424(a)(1) - Voluntary Removal or Demolition

Losses due to the voluntary removal or demolition of old buildings, scrapping of old machinery, equipment, etc., incident to renewals and replacements, are deductible from gross income. When a taxpayer buys real estate upon which is located a building which he proceeds to raze with the intent of erecting thereon another building, it will be considered that the taxpayer has sustained no deductible loss by reason of the demolition of the old building and no deductible expense on account of the cost of such removal, the value of the real estate, exclusive of old improvements, which is presumed equal to the purchase price of the land and building plus the cost of removing the useless building.