From Mike9241's post above: Under IRC 266 and REG 1.266-1 an annual election is required to treat the taxes as part of the capital cost.
A taxpayer who owns unimproved and unproductive real estate can elect to capitalize annual taxes, interest on a mortgage, and other carrying charges.
- The election must be made annually with the original return.
- The election requires a statement in the taxpayer's return describing the property and the expenses to which the election applies.
You will need to print and mail your return. @MANI1346
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