Title 26, Internal Revenue CodeRelease 119-102
§109 Improvements by Lessee on Lessor’s Property
Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter B — Computation of Taxable Income › PART III — ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME › § 109
Summary
Landlords don't count, as income, the value of buildings or other improvements a tenant made when the lease ends, except for rent.
Full Legal Text
Title 26, §109
Internal Revenue Code, Source: USLM XML via OLRC
Gross income does not include income (other than rent) derived by a lessor of real property on the termination of a lease, representing the value of such property attributable to buildings erected or other improvements made by the lessee.
Reference
Citations & Metadata
Citation
26 U.S.C. § 109
Title 26, Internal Revenue Code
Last Updated
Aug 21, 2026
Release point: 119-102