TaxGuided
United States IRC sections

Statute section

IRC section 109

Improvements by lessee on lessor's property

Country

United States

Section

109

Updated

2026-05-20

Operative text

Section 109 excludes from the lessor's gross income the value of improvements made by a lessee on the lessor's property that revert to the lessor upon termination of the lease. Section 1019 prevents the lessor from increasing basis by the excluded amount.

Cross-references

26 U.S.C. 1019

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