Property taxes paid on vacant land can be capitalized instead of being claimed as a deduction. This is an election that can be made by the taxpayer, and is done by adding the amount of the real estate taxes paid to the basis of the vacant land.
Investment interest paid on the vacant lot or unproductive land can also be capitalized and added to the cost basis of the vacant lot.
Real estate taxes on the vacant lot can also be capitalized and added to the cost basis of the vacant lot.
The taxpayer can make an election to capitalize some and not other carrying costs, or make the election to capitalize on a year-by-year basis.
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Question: Can I deduct all real estate …
Answer: It is an election to capitalize the annual real estate taxes paid on vacant land instead of claiming the real estate taxes paid as a deduction. In essence, an expense is capitalized by adding the amount of the real estate taxes paid to the basis of the vacant land.
Can I deduct all real estate taxes on a piece of land sold?
Specifically, you’re still allowed to itemize, but the itemization is capped at $10,000 (or $5,000 if you are married and filing separately). This could be an issue if your land …
Are Property Taxes on Vacant Land Tax Deductible?
You can elect to capitalize all your costs, or capitalize some and not others--for example, you could capitalize interest but not property taxes. To make this election you should add…
Tax Deductions for Vacant Land | Nolo