Taxes on Land

[Max W]

I seem to remember many years ago, that if taxes were paid on land and SD taken, that the taxes could be added to the basis of the land.

Does this sound right to anyone?

[Lynn EA USTCP in Louisiana]

Yes, available for taxes on raw land only. 

[Lee B]

Copied from The Tax Advisor:

How to make the IRC Sec 266 election?

You can make the IRC Sec 266 election when you are filing with original return for the year for which the election is made with the following statement:

“For tax year ………., taxpayer hereby elects under Code Section 266 and IRS Regulations 1.266-1 to capitalize, rather than deduct, property taxes, mortgage interest, insurance expenses, and other miscellaneous carrying costs on the property at ………………………………

 

Remember the Section 266 Election is an annual election available for Investment Property.

[Max W]

If itemizing, it can be deducted on Sch A Line 6 and Not subject to SALT.