263a expense deduction

[pambevins]

We were trying to develop a piece of land. We had survey costs, architectural fees, appraisal fees and soil sampling. These costs were capitalized (some in a previous year) as they would have become part of the apartment building when completed. It was determined that the project wasn't feasible.  We are trying to sell the land and do not intend to use the plans for any future projects. Can I expense these previously capitalized fees in the current year?

[tagteam · Accepted solution]

You really should have tax counsel for this, or a tax professional familiar with this area of the tax law.

Regardless, and just in general, these costs are typically recovered at a time when the property is used, sold, placed in service, or otherwise disposed of by the taxpayer.

See Treas. Reg. §1.263A-1(c)(4)