Land

Land is real estate that is exclusive of any buildings or other assets situated on the property. Depending on the terms of a land ownership agreement, the owner may be awarded the right to use all natural resources on and under the land, which may include water rights, fishing rights, mining rights, and so forth.

Land assets are classified within a separate fixed asset account. Land is the only asset that is not depreciated for financial reporting or tax purposes. This can result in the improper shifting of real estate costs away from the land portion of an acquisition in order to maximize the amount of depreciation that the new owner can claim as a tax deduction.