I have been reading various threads about capitalizing costs of undeveloped land, including property taxes paid. I also consulted with a CPA who advised me that I could elect to do this but was not clear how to do so using TurboTax. I see in the last posts from @Mike9241 and @Hal_Al that one must attach a statement to the return "describing the property and the expenses to which the election applies," but no instructions on how to do this using TurboTax. Must I simply print out my tax return and MAIL it in with the attached statement? 😟Will the TurboTax guarantee still apply if I don't file electronically?
I assume after reading all the posts that this election will not affect my actual tax return, but will serve as the only means of reducing my basis in the property and thus reducing (somewhat) the capital gains incurred when we eventually sell it. On a side note (just venting), it seems patently unfair to NOT make any adjustments for inflation when it comes to determining long-term capital gains. Clearly, $15,000 in 1995 was worth a lot more than the same dollar amount today - and vice-versa. Also, how is the average taxpayer to know about including a statement in order to capitalize the costs of owning land? We never considered the land we bought to be investment property - it just kind of turned into that after a while when it became clear we were never going to build on it and live there. I always assumed that we could deduct the taxes we paid every year on it at the time we sold it to determine capital gains. I know now that this is incorrect, but it feels very unfair.
